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Proposals increasing fiscal flexibility need passage

It’s three-quarters of a loaf, but certainly better than nothing, that Gov. Bobby Jindal and like-minded legislators have proposed to deal with future difficulties that loosen many parts of the straitjacket afflicting Louisiana’s fiscal structure.

Jindal announced that legislation will be introduced at the upcoming session that would increase flexibility in budgeting for periods of projected deficit. Beginning next fiscal year, during periods of deficit the proportion of dedicated monies that may be moved from one purpose to others would double from five to ten percent, interest collected from funds holding these monies could be removed additionally during deficit conditions, and a review of funds on a regular to basis to determine genuine need for their existence.

Some of this has come up before, this history clouding its chances for passage.
Twice the increase from five to ten percent has been proposed, although this time it excludes monies in constitutionally protected funds for a current fiscal year and exempt funds related to business regulatory activities (that is, funds that only businesses pay into to be used to pay for regulation costs of them). Also the review of funds regularly came and went last session. Perhaps the imperative of budget shortages of the past two years will encourage passage of these kinds of matters, where the percentage increase constitutionally requires a two-thirds vote to achieve.

The reform package comes up short for the total overhaul necessary. That would mean a constitutional amendment to allow constitutionally-protected funds to be affected in a current fiscal year, it maintains the reduction level at five percent (one percent for the Minimum Foundation Program) for projected deficits in the next fiscal year, which also would require constitutional amendment to change, it does not apply to deficit positions regarding reduction in federal funds, also needing a constitutional amendment, and it does not take effect until next fiscal year (by the time it could be passed this year, too little of it would remain to have much impact).

Still, it gets a lot of the job done. Most useful in the long term would be the review of dedications, which would not even be necessary as the Legislature at any time can unlock them, but it does provide a permanent planning and evaluation regime that increases the chance that revenue streams that changing times and priorities have made questionable get changed, suggested by last year’s Commission on Streamlining Government recommendations.

Only a desire to protect certain constituencies and a general attitude to evade responsibility, by claiming the law makes them do certain things and takes away their need to make priorities on their own, among enough legislators stand as obstacles against these reforms. But since the current system indiscriminately foists the much of the brunt of deficit reduction on health care and higher education, these changes that increase the ability to set priorities must pass.

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