Battle to come over last year's surprise surplus?

Just because Louisiana finds itself with a surplus in closing out fiscal year 2017 doesn’t mean it can’t apply this money to next fiscal year.

Realized revenues for last fiscal year went $143.2 million above the budgeted baseline. It might hit $143 million. But, as it becomes in a sense “bonus” money, those kinds of dollars the state only may spent on a set of nonrecurring items, classified in the Constitution as paying off bonds early, reducing the unfunded accrued liability in retirement accounts, spending on capital outlay (especially for roads with federal matching funds available), filling the Budget Stabilization Fund, or engaging in coastal restoration efforts. The law also gives priority to the BSF and UAL, designating a minimum of 25 percent (or, if greater, $25 million) and 10 percent, respectively, of any declared surplus goes to these.

House Speaker Taylor Barras already has voiced a preference to put at least $99 million into the BSF. That would repay draining it that amount in the year’s first special session, although the BSF statutory ceiling would allow depositing a much larger amount. By the numbers, with the recently found money at least $35.8 million must go to the BSF and $14.3 million to chip away at the UAL.


But what about the additional $30 or so million? That actually could get used in the next fiscal year, in a derivative way. It can take the place of paying off bonds with revenues collected this year, or pay off other bonds earlier and reap a smaller reward of not having to shell out for interest, which also could go for FY 2019 expenditures. Note the chain reaction that would have to occur: 2017 dollars free up 2018 dollars that can pay forward in to 2019. This avoids any declaration of nonrecurring status because it does not find unexpected revenues but instead sops up expenses that otherwise would be incurred, leaving the future dollars available for use elsewhere.

However, if Barras’ idea fails to gain traction and all 65 percent is up for grabs, whether that constitutes the best budgeting by the book as much as $93 million could swim its way into the FY 2019 budget, reducing the so-called “fiscal cliff.” Pressure may increase to take this minimal solution as a result of early predictions of less revenue than anticipated for FY 2019.

If so, this could set up another battle between Republican Barras and his House leadership with Democrat Gov. John Bel Edwards. The House GOP wanted not to spend all available revenues for the FY 2018 budget, but Edwards picked off enough defectors to squeak through his preferred budget that did. In numerous public fora, Edwards has stated the money cannot go to recurring items, but he has yet to comment on its indirect use this way.

With another special session all-but-inevitable at the beginning of next calendar year, another battle like that may be brewing over the bonus bucks.