This afternoon, the Revenue Estimating Conference for Louisiana formally certified what had been put in front of it almost two months ago, that the state has $827 million to spend on nonrecurring items. Regardless of the motivations that delayed recognition of this money, it has met the legal requirements and now is available to be spent.
That acknowledged, the next step is for the Legislature to authorize a lifting of the constitutional cap on spending for this purpose. The state’s constitution prohibits spending beyond a level determined by the amount of economic growth in Louisiana’s private sector. Since so much federal money has been poured into the state for recovery efforts, being money that did not come from tax revenues courtesy of actual economic growth in the state which has lagged government spending growth by far, the ceiling is about $658 million below the $827 million extra now recognized.
Gov. Kathleen Blanco has pledged this money will go to road construction and repayment of retirement debt – the former faces a tremendous backlog and the latter is unfunded to a tune of roughly $11.45 billion. If she is serious about using this money – again, constitutionally it can be used only for one-time expenditures like these – she will ask the Legislature to send these funds only to pay off the unfunded accrued liability (UAL) present in the retirement accounts and only what is known as the TIMED program.
Such actions would denote a responsible approach to using the surplus because they would not be used for overtly political purposes, in focusing on real needs. No one politician can use funding the UAL as a tool to get reelected because shoring these up targets disproportionately favorably no legislator’s district. Similarly, by plowing other funds into TIMED, a set of (16 then, with six completed now 10) infrastructure projects agreed upon 18 years ago, again political opportunism and favoritism to specific legislators would be minimized.
By contrast, if Blanco were to send most of the newly-minted funds into the capital outlay process that would result in funding for roads being the whim of whatever legislator had the most pull and most intensely backed Blanco’s other plans, this would indicate a lack of seriousness in terms of sensible priorities for spending. As has been the hallmark of Blanco’s term in office, politics rather than priority would triumph in this scenario.
With Blanco running for reelection, chances actually are decent that she will depart from her past and actually agitate for sensible use of these funds.
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