Louisiana is facing a rare problem: What will the state do with the roughly $100 million surplus it expects to find when the 2016 fiscal year is finally tallied.
The fiscal year ended June 30, but the final accounting has not yet been completed. The good news, though, is that there is expected to be more and $100 million left on the books.
Now, the question is what it should do with the extra money.
First off, this is a state that is in a seemingly perennial financial crisis.
After years of cuts, state officials expect yet another $1 billion shortfall next year when temporary sales taxes passed last year to put off the shortfall expire.
So there isn’t really anything “extra” about the year-end surplus.
Still, it is money that was not expected. And at least one leader in Baton Rouge has a great idea for it: Save it.
That is a great thought. The state used nearly $100 million from its “rainy day” fund to make it through last year. So, House Speaker Taylor Barras has proposed paying back the emergency fund with the surplus.
That idea has merit. With Louisiana seeming to meet financial emergencies at least every year and sometimes even more frequently, the rainy day fund is a good use of any money.
By law, 10 percent of any surplus must be used to pay down the state’s retirement debt. And another 25 percent must go into the rainy day fund. But Barras wants to put as much as possible into the rainy day fund.
Senate President John Alario, meanwhile, has said the money should be set aside until it is clear where it can best be used.
That idea, too, has some merit.
The great news here is that at least state budgets won’t see mid-year cuts to deal with unexpected shortfalls. And in at least one tiny part of the state’s books, there is some money that hasn’t already been spent.
Whether it goes into the rainy day fund or gets saved for later budget negotiations, at least the surplus is on the right side of the balance sheet.
Gov. John Bel Edwards hailed the surplus as an indication that better days lie ahead.
“It shows that we are heading in the right direction,” he said.
Let’s hope that’s the case. But let’s be prepared in case it’s not.
Editorials represent the opinion of the newspaper, not of any individual.