Edwards resists maneuver to right-size LA govt
Just as Louisiana’s House Republican leadership seems bound to cut the size of government, Democrat Gov. John Bel Edwards seems determined to keep it inflated with assistance from media allies.
At yesterday’s meeting of the Revenue Estimating Conference, told that in addition to an already hypothesized $313 million deficit that as much as $464 million could develop on top of that, the panel deferred 2-2 to make an official adjustment to the forecast. Edwards’ right-hand man Commissioner of Administration Jay Dardenne and Edwards’ ally Republican Sen. Pres. John Alario voted to make the recognition, but GOP House Speaker Taylor Barras and economist Jim Richardson deferred.
Barras said he wanted to take another month to see whether revenues, which continue to underperform predictions, would snap back. Richardson said he felt on the fence between officially starting the deficit reconciliation process and hoping for more revenue but Barras’ position he found reasonable enough to tip the balance in favor of no declaration. In any event, even one vote against would block making revised projections, as only unanimity can change a forecast.
Dardenne termed this action irresponsible, managing to squeeze in both truth and fiction by remarking “We don't like cuts, but we can't act like they don't have to made.” He spoke truthfully in the first part of that sentence: the last thing the Edwards Administration wishes to do is to shrink government, and it more easily can prevent that had a deficit forecast occurred.
If making a deficit declaration of this size, a clock would have started ticking. The Edwards Administration would have 30 days in which to begin cutting spending and redirecting other dedicated revenues from all but a handful of funds to cover areas where spending exceeded predicted incoming revenues. If in that span the gap remained unclosed, then Edwards would have to call a special session of the Legislature, a good three months prior to the regular session. Like the regular session, such a special session permits measures to raise revenues.
That’s the real objective of Edwards: not finding himself forced to make cuts but to increase the tax bite on citizens to keep inflated government. Despite giving lip service to the idea that he doesn’t want one, he could use a looming session as a crutch not to find things to cut and then pressure the Legislature to increase taxes in the session. But without the session, as time goes by if revenues continue out of whack, the impetus to make cuts unilaterally becomes stronger even if a special session eventually emerges.
That ability exposes the fictive part of Dardenne’s sentence. Just because a formal process does not begin to deal with a deficit does not mean one must act as if cuts don’t have to be made. Indeed, the Edwards’ Administration gave an object lesson in how to prepare for deficits without triggering the constitutional procedure when, at the beginning of the budget year, it cautioned state agencies to hold back five percent of their appropriations for this fiscal year in case last year’s closed with or this year’s developed a deficit. Edwards also unilaterally could issue an executive order putting spending constraints into place for the agencies under his direct control, which, outside of elementary and secondary education, comprise the vast majority of state spending.
Thus, understand that Dardenne’s objection reflects purely partisan concerns. The Edwards Administration fears having to make cuts and, worse, taking blame for these. This is why at least one media ally took to alleging that cutting through the official process could not completely wipe out the deficit, even if assisted through supplementation of the one-third of the Budget Stabilization Fund permitted constitutionally, $119 million.
That’s nonsense; during the 30-day period and in the session, the governor or Legislature may engage in the dedicated revenues redirections of up to five percent of appropriations for almost all funds and one percent for the Minimum Foundation Program not devoted to instruction (about 30 percent according to this year’s formula). An MFP diversion alone could find over $100 million (keep in mind this would represent a two percent cut in existing funds since half of the year has gone by) and from other funds hundreds of millions more can come, without even touching the general fund. It only takes political will to do so.
The Edwards Administration could use the next month to identify areas to cut, and then if in January the REC recognizes lower revenues, it could implement these swiftly if not already having done so in effect by embargoing use of these monies. This requires only a commitment of reducing the size of government with priority over taking more of what people earn. Any criticisms about unwillingness to enable calling a special session sooner show not genuine fidelity to responsible governance but instead to a political agenda to grow government.
Posted by Jeff Sadow at 12:00