Louisiana officials say the state would be forced to stop giving out food stamps in January under the budget passed by the Louisiana Legislature and signed by Gov. John Bel Edwards this week, unless state lawmakers agree to renew taxes later this month.
About 860,000 Louisiana residents -- or 19 percent of the state's population -- use the Supplemental Nutritional Assistance Program, better known as food stamps, to help pay for groceries. The state says 64 percent of those people are elderly, disabled or children. At least 27 percent of those people have "earned income" -- or jobs.
"Unless they change this in the next week or two, I have to start working to shut down this program," said Marketa Walters, secretary of the Department of Children and Family Services, in an interview Friday (June 9). "No other state in the union has done this before."
State lawmakers and Edwards approved a budget this week that would avoid these and other budget cuts, but the Louisiana Legislature failed to pass the taxes needed to fully fund that plan. As a result, the current spending plan that will go into effect after July 1 includes steep reductions to several state agencies.
The Department of Children and Family Services would absorb a $33.6 million reduction in funding cut over the next year, according to budget documents provided by the Louisiana House of Representatives. State funding for the agency was $192.7 million overall in the current fiscal cycle.
The reduction would mean the loss of over a billion dollars in federal funding for food stamps. If Louisiana doesn't provide state money to help oversee the administration of the food stamp program, then it can't access the $1.4 billion in food stamp money that Louisiana would be expected to give out.
House Republicans have criticized the Edwards administration for throwing out dire or drastic budget cuts in order to drum up support for more taxes. Walters insisted threats of cutting the food stamp program is not a "scare tactic."
Walters said her agency cannot reduce child welfare services -- foster care and protective custody for children -- by $34 million. The only other major area of state funding in her agency is emergency preparedness. The department runs temporary shelters during hurricanes, flooding and other weather events. That would also be dangerous to cut considering the number of disasters Louisiana experiences.
And if the agency reduces money spent on its child support enforcement program -- a third area of major spending in the agency -- the federal government will yank dollars from the state's Temporary Assistance for Needy Families budget, which she said is used to support child welfare investigations, drug courts and a number of other programs in the state that are needed.
"This is it. This is the reality of our budget. This is the only place it can happen," Walters said Friday of cutting food stamps. "This is nuts. The whole thing is just nuts."
If food stamps get cut, it won't just be the families that receive the benefits that will be hurt, according to the agency. The state government will have to lay off around 1,000 people associated with the program. Several retailers also depend on food stamps for a significant portion of their business.
Without the regular food stamp program, Louisiana also won't qualify for the disaster supplemental assistance program, which provides funding for groceries to people who are recovering from hurricanes, flooding and other disasters.
If lawmakers don't raise more revenue later this month, Walters said she will start initiating the termination of food stamps in Louisiana in September. The federal government requires advance notification, even if the program isn't cut off until January.
The cuts will also mean that the Department of Children and Family Services can't implement a new expansion of the foster care system to teenagers who haven't graduated high school. A new law passed by the Legislature earlier this year would allow people to stay in foster care until they have graduated high school or turn 21 years-old -- whichever comes first. Currently, people are kicked out of the foster care system once they turn 18.
The state faces a financial shortfall mostly because the state sales tax rate is scheduled to fall from 5 percent to 4 percent in July, when the new budget takes effect. Republicans and Democrats have agreed -- sometimes reluctantly -- to keep a higher sales tax rate in place, but there is a debate about how high it should go.
The House Republican leadership has only been willing to raise the sales tax rate to 4.33 percent, which will still require some significant budget cuts, though not the severe ones that are currently on the table. Senate Republican leaders, Democrats and the governor were pushing for a 4.5 percent rate.
The difference between these two rates is relatively small -- just 17 cents on a $100 purchase. Edwards has called a special session on taxes -- the third one of this year -- in the hopes that the two sides will be able to reach a consensus on what to do.
If the Legislature decides to raise the sales tax only to a 4.33 percent rate, Walters, an Edwards' appointee, said she thinks the reductions to her department will still be so significant that the food stamp program would still have to be eliminated. She said a 4.5 percent rate is necessary to make sure her agency can continue all of its programming.
Clarification: This story has been updated to reflect the elimination of Louisiana's food stamp program could cost the state $1.4 billion in funding for groceries for low-income people.