Perhaps that’s the consequence of
a budget that, in operating terms, contains more money than last year’s (as in
its posture at the end of 2013) by almost $200 million in state general funds,
even as the overall budget was down more in total than that three times because
of mainly reductions in federal funding. However, much of that federal
dwindling comes from reduced disaster recovery aid. This kind of outcome tends
to cut down on the carping, and last week in preemptive fashion the Gov. Bobby
Jindal Administration accentuated this by in piecemeal fashion letting out
its plans on this largesse, addressing matters that perhaps were not the most
pressing but which received the most attention and political pressure on their behalf.
By far the biggest SGF boost came
in the area of higher education at $375 million, where an overall operating
increase of $141.5 million was announced, with $87.7 million of that coming
from tuition increases. Interestingly, the FY totals of total spending are
actually several million fewer being spent than last year, but this is because of
apparently about $150 million in non-recurring expenditures, much having to do
with the transition of medical education largely being done by publicly-run
hospitals to now almost exclusively by hospitals (including those owned by the
state) run by the private sector. With this greater efficiency, the state will
now be spending per student (using fall, 2012
student numbers) about $11,820 compared to FY 2008’s $13,544,
or a decline (unadjusted for the changing mix of senior/junior college
enrollments) of almost 13 percent per student.
Other increases allowed for
permanent raises to both all eligible state employees and, through the Minimum Foundation
Program, teachers, and in dollars to fund individuals with disabilities in
home- and community-care settings. These also have benefitted from increased
efficiencies in implementation, but, along with higher education, benefit from
the increased SGF pot from tax amnesty proceeds from this fiscal year as well
as from an assumed $100 million from next year. That might
be a bit dicey, given the unusual economics with the amnesty concept, and
also this regular amnesty use threatens future years’ more predictable revenue
flows and thereby budgeting integrity by training larger taxpayers to hold out.
This makes especially the state employee raises, which would become a recurring
commitment, a questionable choice, especially given the very
generous benefits already given to state employees, but after a four-year
period where no performance pay raises were given to some state employees, this
might have been tossed in there for morale’s sake – especially because both
employees and taxpayers will have to suffer increased health benefits costs for
these employees. The misnamed Patient Protection and Affordable Care Act will
cause a 5 percent increase in these, along with other more minor causes contributing
to that.
Nor may the MFP boost be all that
wise, but again perhaps triggered by pressure inside and outside of government.
In part, this may be a reaction to a suit
filed that asserts the state underpaid schools districts as a result of a
court decision about that funding mechanism relative to its use in the state’s
scholarship voucher program. This also meant that MFP bucks could not be used
for the program, so discretion may have been the better part of valor in that
holding back on any increase could save money for the future if an adverse
court ruling comes down and/or to fund the new statewide program.
Disappointingly, only $25 million
was peeled off of nonrecurring revenues produced from the amnesty and elsewhere
to pay down the statutory
requirement that the state pay back its Budget Stabilization Fund by the
end of FY 2016. Given that means the amount owed after this will be in the
neighborhood of $300 million, clearly the Jindal Administration believes the
gradual upward trajectory of the state’s revenue picture will allow for this
next year. Another $14 million goes to slightly dent the ticking time bomb of
paying off unfunded accrued liabilities consequent of the overgenerous pension
system by 2029.
Of great cheer to some
legislators in particular was that not just declared nonrecurring funds were
budgeted to nonrecurring purposes, but that “one-time” funds, or money from
recurring sources that does not go into the general fund but into others that
then are transferred to be spent for general-funded purposes, were kept
relatively low as a revenue source compared to recent years. While the House of
Representatives faction known as the “budget hawks,” despite caterwauling long
and loud about the use of one-time money had little impact except
to increase spending, their pressure may have paid off in that the Jindal
Administration did not repeat last year’s experiment of using genuinely bonus
revenues such as property sales to fund recurring expenses. Whether much squawking
occurs about the funds transfers necessary this year remains to be heard. Also
encouraging is the continued right-sizing of government, with around 1,000 more
positions, essentially all presently vacant, getting lopped off.
Despite these areas of
controversy, little criticism came out of official Baton Rouge about the
budget, perhaps muted by a collective sigh of relief that continued reductions
seem unnecessary in the near future. Jindal has done a very
good job in managing spending under these conditions, in part because it
gave him a chance to follow his instincts, shaped by both a technocratic
outlook and an ideological imperative, that strive for more efficient service
delivery and service delivery proportionate to actual needs and priorities. Now
the question is whether he can continue budgeting in this direction under less
austere conditions, for it is under these circumstances that the typical
Louisiana politician’s eyes become increasingly filled with dollar signs, and
his mind begins to wander to thinking how he can distribute them to pick up
votes in his next election, instead of pondering whether they are needed at
all.
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