Louisiana Political News Service

TIMES PICAYUNE
By Jan Moller
Capital bureau
(excerpt)

BATON ROUGE -- With an unexpected surge in state tax revenue generating $400 million more than forecasters had predicted in the wake of two devastating hurricanes, Gov. Kathleen Blanco said Friday that she plans to include a pay raise for public school teachers in the budget she will present to the Legislature next month.

Also unclear is how the idea will be greeted by lawmakers in Baton Rouge or decision-makers in Washington, where Louisiana's financial stewardship is being closely scrutinized as debate continues on how much money to provide for hurricane relief. Blanco rejected the notion that Louisiana would send a poor message by using its surplus dollars for something besides recovery and reconstruction.

The idea of revisiting an issue that was a central focus of the 2005 legislative session took hold after a state panel determined last week that the state will have $410 million more available this year than a forecast had projected. The Revenue Estimating Conference, which makes the official determination of how much money the state can spend, also added $101 million to its projection for the budget year that begins July 1.

Before the latest revenue numbers came out, the administration was asking state agencies to expect cuts of up to 20 percent next year as they prepared their budget requests. That changed when the new forecast came out Feb. 17.

By proposing a teacher pay raise, Blanco will be revisiting an idea that failed to get through the Legislature during last year's regular session, when lawmakers balked at an administration plan to raise cigarette taxes by $1 a pack to finance a $3,300 annual raise for teachers and smaller raises for college faculty.

Blanco predicted easier sledding for this year's proposal because it will not be tied to a tax increase. "I think it'll be much easier, that's self-evident," she said. "I can't imagine the Legislature really taking quarrel with this."

There could still be significant budget fights ahead, however, as legislators from across the state try to allot money for their own priorities and others try to hold the line on new spending.

The proposal also could prove contentious among some legislators. Sen. Craig Romero, R-New Iberia, said the state should reserve any extra money in the budget for emergency spending.

"We still have a . . . bill from the government that's hanging over our head that we have to pay," Romero said, citing money that the state owes the Federal Emergency Management Agency for its share of hurricane-relief spending.

The budget picture likely will change again, as the revenue panel is scheduled to meet again in May to provide lawmakers with an updated forecast.

The state has several options for spending its surplus dollars. The money could be plugged into next year's budget, or it could be used to pay debts in the state retirement systems or used to pay one-time costs such as legal judgments.

Steve Monaghan, president of the Louisiana Federation of Teachers, said he is encouraged that Blanco is revisiting the teacher-pay issue but said he will reserve judgment until more details become available.

"No one's going to turn down any economic relief, but there's a sentiment (among teachers) that there's a large burden to be dealt with because it hasn't been addressed the last six or so sessions," Monaghan said.