The Jindal administration told state agencies Tuesday to prepare for a possible $200 million mid-year cut.
The cut might materialize if the state loses a current lawsuit challenging the use of “rainy day” funds to balance the budget.
University administrators had not been given any instructions Tuesday concerning the cut, said Ernie Ballard, director of public affairs.
The lawsuit, filed Monday by Baton Rouge native Bob Reid and Ron Gomez, a former state representative from Lafayette, argues the Legislature violated the state constitution by not refilling the fund immediately after using it to fill this year’s budget deficit.
The issue of whether the state was required to refill the fund immediately was hotly debated between the House and the Senate during the last legislative session. The Senate’s interpretation — that the state could wait to repay the fund — eventually prevailed.
If the suit is successful, the state would be forced to refill the fund immediately, forcing a mid-year cut to the state’s operating budget.
That cut would come before the state deals with an estimated $1.6 billion shortfall for the next fiscal year.
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