Usable in this current fiscal
year was a predicted and therefore budgeted $200
million, devoted to the financing of health care and higher education. Louisiana’s
Department of Revenue announced that after this amnesty period ended this past
week that collections hit that mark, and could go a bit higher. But having this
funding fulfill its part to make sure budgets get met is another matter, for
two reasons.
One is that the Revenue
Estimating Conference will meet in about two weeks to come up with the fiscal
forecast that will be used to prepare the executive budget for next fiscal year
and to provide a marker for budgetary performance this fiscal year. If the
forecast is lower than had been anticipated when budgeted, this could cause
cuts in state spending effective nearly immediately.
That does not seem likely, given
existing trends, and thanks in part to the haul from the amnesty, which
combined point to more revenue that predicted coming in this fiscal year.
However, the REC has discretion in terms of how it wants to classify the
amnesty money, either as recurring or nonrecurring. If the latter, that money
can be spent only on a very limited menu of items, with only payments to reduce
debt and unfunded accrued liabilities that could end up increasing money
available to be spent on operating expenses.
And any REC member, where
unanimity is needed to make an official forecast, has good reason to insist
that at least some amnesty proceeds end up classified as nonrecurring. After
all, some portion could be money that never would have been collected, either because
the entity would have held off successfully in avoiding collections activity to
stiff the state, or because it would have using regular dispute procedures gotten
the amount reduced. So if one or more members decide to treat part of the sum
this way and adamantly holds out unless recognizing this bit as nonrecurring, this
forces budgeters to use the most previous forecast that most likely includes
fewer dollars, the REC as a whole could submit to this faction and thereby
declare the recurring portion at below $200 million for recurring matters.
Perhaps more probable, past
amnesty experiences provide persuasive evidence that they beggar even current-year
collections. For example, attendant to the most recent previous 2009 version,
the Legislative Fiscal Office cautioned
in the REC’s forecast that this amnesty almost certainly accelerated
collections that would have been picked up in the dispute resolution process.
While that may affect future years mainly, some could have come in the current
fiscal year on which the current budget depends. Further, that future
collection could have included higher penalties if that chunk had not been part
of the amnesty. What’s more, having this amnesty just four years after the
last, which had been twice in time from its predecessor, may be encouraging a
perverse incentive for more entities to hold out more payments in the hopes of
another amnesty coming soon, which could impact negatively collections this
fiscal year.
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