Budget hawks finally willing to back words with deeds?
Have so-called fiscal conservatives in the Legislature finally decided to take what has been to this point a supremely unserious effort in budget reform on their part and actually give it some substance? One only can hope with the pledge by a more than a couple of dozen of them to form a caucus and with it a political action committee to pursue this matter.
Absent these actions, it’ll be yet another case of hot air, a vehicle to allow its members to claim falsely they are something they are not in the never-ending quest for votes. It’s what they have been in the past, but hopefully it’s not too optimistic to wish this time they actually will act authentically.
To date, the manner in which they have approached this has been mostly symbolic with little in the way of substance. During the past legislative session, they declared a pox on “one-time” money, some which is actual non-recurring dollars but most of which is recurring money shunted to dedicated funds that run surpluses that then require an extra legislative step known as a “funds sweep” to free them from perpetual non-use. This threw the budget out of balance, for which they then declared they had a solution – let somebody else (the commissioner of administration) take responsibility for balancing it using vague criteria they established, including hypocritically the use of one-time money.
More responsible heads prevailed, but that doesn’t mean the self-designated budget hawks have a bad idea. In fact, the notion that state government is bloated is right on the mark. Louisiana always has had a spending problem, not a revenue problem. But the solution is not to create a straw man born of an accounting trick called “one-time money” and then excommunicate it from a discussion of budgeting. The answer lies in properly matching revenues in order of priority of need, although that itself must come only after a decision (perhaps the first steps of this being taken now) about what amount of revenue and from where is appropriate for the state to address these needs in order of priority.
This means an overhaul of the dedicated funding structure, of which there are around 300 separate ones, mostly by statute. Much of what comes in this way does end up getting spent and for important purposes such as elementary and secondary education. But a surprisingly large amount does not, accumulating year after year as the funding mechanism, locked in by law or the Constitution, keep extracting more money than is needed for the functions to which these bucks are dedicated with the only recourse being separate appropriations bills passed to free these funds. As of the end of fiscal year 2011, the amount bankrolled was almost $3 billion.
But for this to happen, legislators must show political courage as yet invisible in them. It means that they can’t budget by autopilot, where about 75 percent of all revenues come into the state already locked into a function. That makes it convenient for them subsequently to throw their hands up and to declare that they can’t do anything about it, then to try to light up the one-time money straw man to “prove” they are trying to do something about the budget, when in fact it is their own cowardice that causes the problem. For to wipe out most dedicating of funds by legislative act means annually making hard budgeting choices in the matching of revenues to function and having to take responsibility for those actions, instead of being able to claim impotence by blaming past officials and accounting procedures. Actually doing their jobs invites the threat of failing to win reelection, which they desperately want to avoid.
It’s a job they already have shirked despite statute. R.S. 49:308.5 mandates that a regular biennial review of dedications occurs with the goal of terminating those that aren’t useful. Both the Legislature and (also mentioned in the act) and executive branch have failed to follow this since its passage in 2009.
So, if this group is willing to make any genuine contribution to the budgeting process, it will declare that it will undertake what already has been neglected, a review of dedication and readiness to declare a number of them should be subject to sunset. It members then will back bills to do so. They will do the same for any changes recommended to tax exceptions, although they must keep any such adjustments revenue neutral or else they fail to contribute to right-sizing state government. A final component to this would be their recommendations of specific changes in practices and spending cuts to save money – this would be a good place to start, the majority of these suggestions as yet not implemented. Real fiscal conservatives are those who take these steps.
Posted by Jeff Sadow at 10:30