Dog bites man: a huckster who makes his living off of transferring as much of the taxpayers’ wealth as he can to members of his special interest group complained that Gov. Bobby Jindal’s budget plans will make for potentially, well, fewer members of his group that will make it harder for him to justify his salary – in the process, ignoring completely the factors that have encouraged right-sizing of state government, and proffering counterproductive approaches to solving for them.
Leonal Hardman, president of the Louisiana Council of the American Federation of State, County and Municipal Employees, a public employee union, moans about how the plan will eliminate some 6,400 jobs – although less than half currently actually are filled. He further bemoans that a large portion of those ticketed for layoff are in the classified civil service; naturally enough, since almost nobody in the unclassified service would be expected to be in a union. He justifies an approach to lay off a higher proportion from the latter because their salaries are higher.
While the latest data show the average classified employee makes only about two-thirds, around $42,000 annually (about the median family household income in the state), of the salary of unclassified employees (which the article that quotes Hardman then erroneously gives a figure two-and-a-half times larger for that, mistakenly using the figure for only non-merit-based hires), over three-quarters of the latter being paid are employed in two areas where, because of the nature of the work involved, is explained the higher pay: health care and higher education. So what Hardman is suggesting is for layoffs to occur mainly in these two sectors, when he argues the “burden of cost is … at the unclassified sector. That's where the money is at.”
This should surprise no one, because the fiscal structure of Louisiana is set up exactly to make these two areas the most vulnerable and amenable to cutting spending. As this space has argued many times previously, both the Constitution and law have created a straitjacket of funds diversion that money gets dedicated representing about three-quarters of all state revenue spending, which neither of these two areas enjoy. This causes lower-priority items to get more money than they need or deserve, then this begins to accumulate and remain idle, until the Legislature comes along and grabs some of the excess of what then become known as “one-time” funds in order to balance budgets. (Jindal’s budget plans to take out over $200 million of these this time.)
(Perhaps because of a change in accounting reporting standards, the latest information about the amount socked away in those funds is incomplete and less clear. As compared to the state’s 2010 Comprehensive Annual Financial Report, which listed the three major and all 225 nonmajor funds with a balance of nearly $1 billion in major and almost $5 billion in nonmajor unreserved dollars, the 2011 CAFR lists only a tenth of them with a category slightly different by which to report them, which totals for the nonmajor funds listed only about $1 billion. Why the state does not list all funds any more, or whether there is a difference between the old “unreserved” and new “restricted” category in how funds available for use by appropriation are calculated is unknown.)
The truth is, the state is awash in money, it’s just that revenue flows are too constrained to get them to the places of real need. This results in reductions to vulnerable areas, although these can be cushioned to some extent by the use of one-time money and by creative compensation using the general fund. For example, with tourism promotion activities as an example of dedications potentially overfunding an area, steeper cuts in its general fund allocation have compensated (and gotten Lt. Gov. Jay Dardenne griping) to prevent even more drastic cuts elsewhere.
If Hardeman and is ilk really wanted to help, they would advocate for ridding the fiscal of structure of most dedications, beginning with the idea suggested by the Commission on Streamlining Government to review these periodically and dumping the ones that don’t make sense. They also would note that on a per capita basis spending by Louisiana government is among the highest among the states, demonstrating cuts can be made that will have little if any significant impact on the state performing its basic and necessary duties.
Unless Hardeman wants to slash areas already that have been hit with the biggest reductions, his rhetoric makes no serious contribution to the debate about Louisiana’s fiscal structure and current budgetary consequences. Instead, properly understood, it is a tired refrain championing self-interest at the expense of the state’s citizenry.
Posted by Jeff Sadow at 13:55