Jindal budget reducing real, but not as big as claimed

Although apparently headed for an easy reelection, whether Gov. Bobby Jindal has, as his campaign claims, significantly has cut spending in Louisiana over his first term has come into dispute. When looking at the number in the most objective way, it seems that both Jindal and his critics on this issue are correct.

The Jindal campaign, at the simplest level, asserts that he lopped off around $9 billion from the last budget of his predecessor to his most recent. While factually correct, it assumes that the reduction came from conscious budget-cutting decisions made by Jindal when, in fact, not all of it came in a discretionary sense.

First and of course, note that the governor does not made spending decisions in isolation. He may have the majority of input, in his submission of the budget, his shaping it through the threatened and actual use of vetoes, and in implementation decisions that require no legislative oversight, yet the Legislature does pass budget bills and does exert oversight in many implementation decisions. Thus, any claimed reductions in spending in the main a governor can claim attribution for, but he cannot take entire credit.

Second, a great deal of operating expenses of state government get paid for by the federal government – in the most recently reported fiscal year, over a third. And in Louisiana’s case, between the start and end of Jindal’s term, a fair chunk of that almost uniquely was not discretionary – recovery funds relating to the hurricane disasters of 2005. These mainly constituted one-time expenditures for things normally not part of governance in the state and so existed invariantly relative to policy decisions made by policy-makers.

Third, of the remaining federal funds allocated, the governor’s spending decisions only partially influence them. For example, spending fewer state dollars on Medicaid means fewer matching federal dollars to spend, but those funds come in regardless. So, a governor does not control entirely this kind of spending; the only way that happens is in decisions whether to participate in federal programs, such as Jindal’s decision not to participate in, and thereby got no federal funds for, one that would pay more unemployment relief to more recipients.

Finally, the real area of policy-making discretion comes from general fund expenditures, since they are unencumbered in any way. By contrast, dedications and self-generated revenues have statutory or constitutional requirements that forcibly spend. The only other area of discretion in spending comes from the ability to dip into funds separate from the general fund (the so-called “one-time” money), to get at surplus monies produced by dedications and fees.

Parsing out these kinds of factors, the claim about reduced state spending may be fairly evaluated. A review of the state budget report for the fiscal year (2008) budgeted prior to Jindal’s assumption of the office and the latest (2012) provides this information. Comparing general fund totals, Jindal had about a half a billion fewer dollars to work with, and with the self-generated and dedicated funds almost the same amount, just a little less. He also had nearly $8 billion fewer coming from the federal government. However, considering that this difference was mostly recovery money, the net result actually was, adjusted for all of these things, a small net decline.

So Jindal did cut the budget in policy-related ways, but not nearly as dramatically as he might advertise. One could argue that the nature of declining revenues forced him into it, or that if he really made this a priority he could try to get through the Legislature bills to reduce the forced dedicated spending. As it is, his incremental reductions fit his governing style as someone not given to sudden, dramatic changes but who slowly but surely tinkers at the margins to create a more efficient government that spends less and more wisely.