The “hawks,” who forged an identity by declaring jihad against “one-time money,” or recurring funds collected from
sources outside of the state general fund and nonrecurring money from things
like asset sales and legal settlements, made the use of a tax amnesty program as
the centerpiece of a plan to wash away a lot of one-time money from the
recently-passed budget for the upcoming fiscal year. This was despite the irony
and hypocrisy that amnesty
proceeds either were nonrecurring in nature or one-time money themselves.
Of greater concern, and richer in both irony and hypocrisy, is that the
use of amnesty now is defended on the basis of it being a more “stable” funding
that will hit the $200 million mark inserted into the budget. This notion fails
both conceptually and quantitatively, with history showing in fact the state is
unlikely to collect that much this year (this is supposed to be drawn out over
almost three years).
The last amnesty of 2009 pulled in more over its longer span, but only
half of that amount could be classified as recurring by the state entity in
charge of making that assignation, the Revenue Estimating Conference, and it was
working with twice as many years of backlog. This makes it unlikely that $200
million will be collected for use for operating expenses in fiscal year 2014 –
a number which it appears was conjured by legislators with no real reference to
past experience.
Besides the quantitative error, calling amnesty money more stable than
other one-time money rests upon a fiction constantly propagated by the “hawks.”
In the past, most one-time money used by state government has been of the
recurring kind, courtesy of “funds sweeps” where a separate bill takes surplus
money from a variety of funds with dedicated revenue streams and statutory uses
for them and transfers them to the general fund. These are monies that have
grown far in excess of a lower-priority use that otherwise would have them lie
idly or be used for something not really needed, as compared to general fund
activities such as health care or higher education. Most importantly, this cash
is not an estimate of what might come but it is real and sits in accounts actually
available for use (even if that use is not the purpose of the fund and by
implication not the reason they were initially collected.)
So it’s ludicrous to argue that amnesty proceeds, which haven’t even
been collected, provide more stable funding than money already in hand. Yet the
“hawks” have brought to mythological status the notion that one-time money is
so unstable that it has caused mid-year budget deficits in recent years. A
certain kind – the nonrecurring variety – can, because of the unpredictability
of a sale amount or timing of a receipt of a settlement, but that always had
constituted just a small portion of overall one-time money used. Rather,
shortfalls have happened because of overly-optimistic forecasting in
non-one-time money receipts, while one-time money receipts already are there
and not subject to the errant nature of predicting. The “hawks” are at best
disingenuous (if suggesting nonrecurring one-time money has made up any
significant portion of budgeting; in fact, recent mid-year deficits have far
exceeded that entire amount in any given budget year), at worst mendacious to
implicate one-time money as a whole causes these deficits.
Unfortunately, this line of thinking led to amnesty funds not only
being plugged into the FY 2014 budget, but also to expand the size of
government. The budget from Gov. Bobby
Jindal went to the Legislature asking for $24.560
billion in spending. Towards the end of the session the REC declared $155
million more available. After inserting amnesty and other things it came back
to him at $25.383 billion. Taking out the elevated revenue estimate that meant
the Legislature, helped by the amnesty provision, added $668 million in
spending. Jindal subsequently got rid of nearly half of that extra through line
item vetoes (including one of nearly $200 million because Medicaid
expansion did not occur), but the larger point remains: if there is a mid-year
cut needed of anything less than $400 million, it was that extra spending –
signed off on by the “hawks” – which will be the primary cause of it.
And if that happens, that very likely would be as a result of the
amnesty failing to pull in sufficient recurring revenues to cover higher
spending. Which should discredit the “hawk” notion that one-time money – a
relative $80 million pittance in the budget – is the root of all evil and that
their actions created a more sure-footed fiscal foundation.
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