We hear the same complaints again and again from legislators who talk a
great game but when it comes to action are gutless wonders when it comes to
budgeting and spending in Louisiana. If they’d just get it together, the public
could revel in their silence with the problem solved.
That problem is, in times of fiscal stress as now, the state’s
propensity is to conduct “funds sweeps” for “one-time money” in order to
balance the budget. The state has hundreds of dedications of revenues and
fees-for-service tucked into law and the Constitution, making for mostly hands
off concerning about three-quarters of all monies coming into the treasury from
state sources. Unencumbered funds go essentially only to three areas, with the
majority to higher education and health care, so if forecast deficits for next
year’s budget fall, the money only comes out of this quarter of the funding, disproportionately
affecting these areas.
To soften the blow of further reductions on these areas, one strategy
is to pass a bill that raids some of the hundreds of separate funds, which
accumulate surpluses they probably never would use. That happens because the dedication
set up for them is indiscriminate, by definition making their purposes equally
as important as all others similarly situated but more important than areas
without dedications, even if in the real world some state functions clearly
should have much higher priority and need more funding than others subject to
dedication. Thus the vacuuming procedure, a rebalancing of sorts to correct
imbalances created by budgeting by autopilot.
Yet it’s tantamount to hypocrisy when you hear some legislators
decrying the use of one-time money and/or in favor of making bigger cuts to
state government as a whole because it is entirely within their power to change
the system to get rid of a problem they created. With this current regime, with
many dedicated dollars going to low-priority areas, one-time monies have to
materialize to prevent ill-advised reductions. Loosen those dedications and the
money could be appropriated to areas of need without having to dip into funds, because
these pots would not be accumulating bucks and idly sitting by to be ladled out,
with money having gone already to where it is best utilized.
But this shell game continues because legislators refuse even to take
the initial steps to changing this system. Only a couple of years back the state’s
Commission on Streamlining Government recommended
that a number of the statutory (which are most) dedications be abolished at the
end of fiscal year 2011. This was supposed to dovetail with R.S. 49:308.5 to set
up a regular system of review of dedications for potential ending. Instead,
nothing has been done to present either in whole or on a regular basis a partial
list of funds that need termination, because lawmakers don’t want to become
engaged in battles with the special interests than managed to wangle a
dedication for a purpose, sometimes decades ago.
The current system also gives them a chance to disavow responsibility
to deal with funding crises, if not to pontificate disingenuously about them. Instead
of making choices and then having to live with the policy and electoral
consequences of them, they throw up their hands while claiming them tied by
dedications. The crassest then complain about how it’s bad practice to use
one-time money – which they never would have to do if they weren’t such cowards
on the surfeit of dedications to begin with.
Related to this problem is the number of tax exemptions, credits, and
rebates that subsidize some activities that bring more costs to the state than benefits
without any associated desirable nonpecuniary benefits, which themselves have
no systematic review attached to them. Just two examples, which together if
ended would be about enough to wipe out the forecast FY 2013 deficit: the film
tax credits that have taken at least $440 million more out of the state
treasury than put into it since their inception, and the state’s
earned income tax credit that encourages reduced work effort and is
rendered largely ineffective by generous welfare programs that in America that
pay the average recipient under the poverty line $16,800 annually.
Once again, as usual, the Gofer is trying to hide the ball by changing the subject.
ReplyDeleteOur Governor, the Scorecard, promised over four years ago, not to use one-time, non-recurring revenue, to balance the operating budget.
Now, on his FIFTH budget, his Commissioner of Administration and other aides, are leading the charge to balance (?) the budget with hundreds of millions of dollars of such revenue.
So much for the promise!
And, as you clearly know, most of these funds are coming from the Administration backed "sweeps" ("swipes")you write about.
So, yes, there is little discipline among the Legislators, but the leader, the CEO, the Scorecard, is the one demanding that they not do WHAT HE ONCE PROMISED TO DO.
Tell it like it is.