That gathering came after the REC punted
during its previous meeting last week its duty concerning the state’s
unemployment trust fund. R.S.
23:1474 requires that the REC, between Sep. 5 and 30, project the balance
of the fund for the beginning of next September. In doing so, it is to “consider
all information, including projections and information from the United States
and state departments of labor, in its analysis for [the] official projection.”
The determination affects what rates employers
must pay and maximum benefit amounts payable to unemployment insurance recipients
for next calendar year. If the fund has below $750 million, the former increases
and the latter decreases for 2021.
And, in fact, on Sep. 1, not only was the amount
far below that number – courtesy of a drain from higher joblessness triggered
by economic restrictions imposed by Democrat Gov. John Bel Edwards
intended to combat the Wuhan coronavirus pandemic – it was closing on in zero. State
projections say it will go into the red any day now.
Unfortunately, the elected/designee members of the
REC don’t want to acknowledge this, most desperately Edwards’ chief lieutenant,
Commissioner of Administration Jay Dardenne,
because it will make all too obvious the consequences of Edwards’ mishandling
of the pandemic, which among the states has produced the worst
economy and most
troubling health indicators (as of the end of September ranking per
capita first in total positive cases, fifteenth in current
hospitalizations, and fifth in total deaths). Nor are Republicans House of
Representatives Speaker Clay Schexnayder
and Senate Pres. Page Cortez eager to
prompt a tax hike and benefits reduction in case they receive blame for it.
Thus, when the only member not elected or
designated by someone elected, economist Stephen Barnes – an appointee of the
three elected members – moved to recognize the reality of a fund far below the
cutoff to avoid tax hikes and benefit cuts, in fact projected at $233 million
underwater, Dardenne moved in with a substitute motion to do nothing until within
10 days after the current special session expires, which remarks by Cortez previously
showed he and Schexnayder backed. Although one dissenting vote would have
defeated the measure, Barnes withered under this social pressure and went along
with the other three to pervert the law.
There’s no reason the politicians on the panel
couldn’t have followed the law. The legislators could avoid adverse publicity by
getting their chambers to suspend
that statute during the session and then again during next year’s regular
session through the end of 2021, so had the REC recognized reality that would
have had no actual impact. And Dardenne deserves special condemnation for his
hypocrisy, after raising a stink beginning
two years ago when Schexnayder’s predecessor wouldn’t go along with
increasing revenue projections, a position that Dardenne insisted represented a
politicized flight from reality, as
well as earlier this year when the two GOP leaders blocked a proposed
forecast, when Dardenne declared it wasn’t the panel’s job to buck the experts.
Worse, some fiscal shiftiness may come to pass. As
a potential response to the fund deficit, talk has surfaced that the state
ought to float a bond to cover it. But this unwisely would be for an operating expense
and would have to sidestep the Constitution’s requirement
that debt be incurred only to “repel invasion; suppress insurrection; provide
relief from natural catastrophes; refund outstanding indebtedness at the same
or a lower effective interest rate; or make capital improvements,” and
slip under the net state tax supported debt limit in statute, although the Legislature
could change the latter.
Almost as devious, lawmakers could take the nearly $106
million stashed away from the fiscal year 2019 surplus apportioned out
earlier this year and load it into existing capital projects with general fund
components, then back out that amount and flush it into the fund. Another
option depends upon voter ratification of Amendment #3 on Nov. 3, which would permit
a third of Budget Stabilization Fund monies for use related to a federally declared
disaster.
Still, in tackling this problem that Edwards and
the Legislature kicked down the road months ago when they didn’t right-size
state government in the aftermath of a known revenue decline but instead to
keep government inflated budgeted for state recurring expenses federal money
that could have shored up the fund, policy-makers should have started with
honesty, which they ditched with this REC decision, and would have avoided Dardenne’s
hypocrisy.
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