Half-baked budget critique provides no better alternative

While it’s quite fair to point out the hazard behind the concept of using one-off revenues to fund an operating commitment, at the same time it’s incumbent on those doing the criticizing to come up with responsible alternatives to deal with any ensuing revenue adjustment – especially when they haven’t quite characterized the source of their complaint fairly.

That’s the trap state Reps. Thomas Carmody, Cameron Henry, and John Schroder have fallen into extending from their critique about one aspect of Gov. Bobby Jindal’s proposed budget. It concerns two presumed bonuses the state will collect with their proceeds going to fund higher education.

The state will take advantage of artificially-low interest rates to refinance indebtedness to pay off advancement of the tobacco settlement in 2001. Instead of taking some annuitized payments, the state arranged to take 60 percent of the money up front, or $1.202 billion, three-quarters socked it away in a fund, the Millennium Trust Fund, and promised to make periodic payments to lenders for getting it earlier. Refinancing of the bonds to help pay for that will save $85 million, available within the upcoming fiscal year.

Legislature fiddles while passing on burning budget items

Both efforts ended up the same way. That one did as it did and the other was pursued at all tells us all we need to know about the courage and priorities of the Louisiana Legislature.

Yesterday, the Legislature’s Revenue Study Commission issued its final report, which boldly stated that not all of the hundreds of tax exemptions on the books might be worthwhile, but that more data were needed to know that, and that they should be collected when they aren’t (even though common sense might have indicated creating such evaluative mechanisms each and every time another one of these was carved out), and maybe the Legislature ought to do something about this and a bunch of these exemptions. Meanwhile, dog bites man.

The same day these scintillating conclusions got broached to the wider world, another legislative panel spent 270 minutes tackling, with arguments about sequester effects, budget gimmickry accusations, and tax reform agendas swirling about competing as subjects of legislative investigation, the all-important, if not the most pressing issue of the millennia – whether the Louisiana High School Athletic Association should do as Texas has done for decades, creating separate championship classifications for public and non-public schools. At the conclusion, its members decisively moved to do nothing about what apparently legally they could do nothing about anyway.

GOP Jindal successor hopefuls differ in early strategies

So you looked at a calendar and thought it was 2013? Guess again; it’s really 2015, you would derive from statements being made by individuals believed to have great interest in succeeding Gov. Bobby Jindal. Statements, in fact, that reveal an early strategy of building desired campaign success on criticizing their party’s incumbent governor – or not.

Lt. Gov. Jay Dardenne is no stranger to whining about how the area over which the Constitution assigns him authority, culture, recreation, and tourism, has faces disproportionate reductions in discretional provision of services – not as much because of revenue reductions, as a large majority of the money this department in state government receives comes from dedicated sources, but because of revenue redirections permitted under law that take away his ability to spend money as he pleases. Now he’s found more reason to complain on this score.

This time, it’s because state law allows for money dedicated into a fund often used for maintenance of parks also to be used for their continuing operations, which is what Jindal proposed and the Legislature passed last year, and what Jindal has proposed that most of the money his administration forecasts will go into it does again. Dardenne moaned about how repairs need to be made to park infrastructure as a result of last year’s Hurricane Isaac, and how the redirection was cramping his style in this regard. He argued the state could make money off of the repaired facilities, which feeds back into the fund which may be needed to support operational activities, as budgeted.

Bills to privilege state laid off employees unjustifiable

Mondays are slow news days, so today the Baton Rouge Advocate took out of the can a piece about a bill introduced the week before last that makes one wonder just how much the legislation’s author knows about state retirement regulations and/or the free market.

State Rep. Regina Barrow has introduced bills that would create exceptional treatment for long-time employees of the state hospital system. According to the budget to be considered this year, about 95 percent of them will lose state jobs as eight of 10 charity hospitals will be administered by nongovernment entities by Jul. 1. (Number seem to differ – the budget reports about 8,200 positions will evaporate, while retirement system official indicate at least 8,400 employees are covered. Neither have layoff plans yet been presented to the Department of State Civil Service.) However, it is anticipated that the contractors will rehire around 90 percent of those laid off.

Essentially, HB 34 would allow those laid off to transfer their retirement contributions and those put in by the state to another retirement plan, and HB 35 would allow the early drawing of retirement benefits by those eligible in years served. This preferential treatment that almost certainly would increase costs to the state (final calculations have yet to be completed) Barrow justifies by saying “I don’t want employees to have to suffer because of decisions of the state. They did not choose to retire.”

Excess funds tussle exemplifies need for genuine reform

Reshuffling $120 million from a special district into state spending points out the absurdity of the present fiscal rules for Louisiana that create a counterproductive straitjacket, causing misallocation of revenues and complicating needlessly the budgeting process, as well as providing more posturing opportunities for politicians.

For this current year’s budget, $20 million of expenditures are to be drawn from the Ernest N. Morial New Orleans Exhibition Hall Authority. Next year, $100 million is budgeted to come from this source. This body was created in 1978, to oversee the operation of what is now New Orleans’ Ernest N. Morial Convention Center, as a special district government.

The state wants use of the money in order to fund activities in higher education, saying it will borrow them and then replenish them in kind over several years, treating the funds as unused capital outlay monies that eventually will go into some kind of construction, meaning future unused dollars for state capital outlay can go to paying them off. This upsets some Orleans legislators, such as state Rep. Jared Brossett whom calls this a “raid” and state Rep. Cameron Henry who says it’s “taking someone’s operating budget.”