While the parameters will become clear by the end of the day, the apparent compromise product for Louisiana’s operating budget represents a small defeat for conservatives in concessions on extra spending that perhaps did not have to be made and in the potential for bigger government down the road.
As previously noted, the conservative Republican faction that controlled the Senate, about a third of the House of Representatives, and had the backing of Gov. Bobby Jindal, largely could have dictated terms with the assistance of the non-conservative wing of the party (with a couple of other non-party members) in the House, the so-called “budget hawks” who comprised about another third, cutting Democrats out of the deal. Being that as a whole Republicans had a majority, that should have been the natural outcome, and it largely was.
The “hawks” came on board because the use of “one-time” money – a term that includes surplus recurring revenues dedicated for one purpose but which are used for another and nonrecurring monies from one-off transactions such as property sales – was limited and two bills, HB 437 and HB 620, were promised to be passed in addition to the budget in HB 1. They actually didn’t have much leverage over the former because the amount of that money fell under the total specified in the House rule that would have required a two-thirds vote. But there was trading going on with the legislation, because of the majority needed not just to pass a budget, but also because of the constitutional two-thirds vote requirement to take it up (and the other two bills) with less than three days to go in the session.
Perhaps on the brink of getting glorious something for absolutely nothing, if Republican legislators are smart Democrats may find they got themselves to pull defeat from the jaws of victory on the issue of Louisiana’s budget.
Yesterday, unanimously the House rejected Senate changes to the operating expense budget HB 1. These included adding back in from previous House receipt of the bill some “one-time” money, or a mix of recurring revenues that do not initially go to the general fund and nonrecurring monies from things like asset sales, spending more on higher education and on a educator salary bonus, and reducing cuts to government contracting and other ancillary services that otherwise might not be implementable.
This probably mostly pleased one of the three House factions, conservative Republicans, despite their misgivings over the increased size of government that resulted. That change they likely countenanced to satisfy Democrats, the chamber’s minority but made relevant in the debate because other Republicans, termed “fiscal hawks,” had broken with the leadership and initially proposed a combination of tax increases and cuts, reductions in the least valuable tax credits, and a semi-gimmick tax amnesty in order to wipe out any use of one-time money. Although each group represents about a third of the chamber, the “hawks” had leverage because of the House rule that forces the use of any one-time money past a certain growth factor, which produced a figure of $188 million this year, to be approved by a two-thirds vote.
Posted by Jeff Sadow at 10:15
The failure of state Sen. Conrad Appel’s SB 117 to become law invites another look into how financing of higher education in Louisiana occurs, the facts and myths surrounding it, and therefore how to proceed to reduce the inefficiency of the system while improving outcomes.
His bill would have created a commission to assign performance standards for schools, which subsequently would have been used to apportion state money to them on the basis of outcomes. In testimony, Appel said while the state lagged in support per student compared to southern state peers, the more important issue was performance and getting greater efficiency gains. Critics, and perhaps explaining why the measure failed, argued it was a lack of money in the system where its increase might get better performance.
However, the data largely validate the idea that higher education in Louisiana can be run more efficiently and does not suffer that much from lack of resources. Using the latest data available (2010), the state (of all of them plus the District of Columbia) ranks 18th highest in per capita state appropriations, yet ranks close to the bottom both in degree completion (defined as those finished within six years) and in retention. But in total expenditures per capita, Louisiana is right in the middle, and ranked 32nd in amount of spending per full-time equivalent student.
Posted by Jeff Sadow at 11:35
If you’re Gov. Bobby Jindal and his legislative budgetary allies, you call the bluff.
In the annual exercise of poker being played with real money called the state’s budget, the three-player environment that has surfaced in the Louisiana House of Representatives this year includes Jindal and conservatives who almost exclusively are Republicans, a faction of Republicans and a few others who term themselves “fiscal hawks” who have supported creating a slightly smaller budget of a mixture of tax increases, spending cuts, tax credit reductions, bonus funds in the form of a tax amnesty, and changes to the budget process connected to this year’s product, and Democrats who want higher spending and taxes. The Jindal crew has picked up an important ally in the Senate Republican majority, giving them a firm grip on two of the three legs comprising the lawmaking tripod.
This weekend, the HB 1 version (older one here) that came back from the Senate challenged the strange bedfellow alliance of the “hawks” and Democrats, in different ways. For the former, it pumped in “one-time money,” a mixture of money that includes nonrecurring revenues from things like property sales and recurring dollars that do not originate from the general fund, and decoupled the several tepid and one obnoxious reforms of them from passing as part of this upcoming year’s budget. For the latter, it included items liberals had complained about lack of inclusion such as a public elementary and secondary educators pay raise although in a one-off form, more money to higher education, the small tax increase on merchants, and generally bigger government. For the former, it contests their public oaths about the budget and images as reformers they have tried to carve, while for the latter it entices them to come aboard by giving them stuff they publicly have stated they support.
Somewhat predictably, the Louisiana Senate threw back to the House of Representatives an operating budget designed to bludgeon the political clout of both the minority party Democrats and a faction of the majority party Republicans by making offers that can’t be refused nor can be resisted. Meanwhile, the fiscal system that produces this chaos remains the same and grows government.
The version of HB 1 that came from the House represented a significant departure from the version initially introduced by Gov. Bobby Jindal. Most dramatically, it removed large swaths of some kinds of “one-time money,” such as transfers of surplus money from dedicated funds and borrowing from dedicated funds of state-authorized entities, and replaced it with another kind, a tax amnesty program. It also made some minor across-the-board spending cuts, eliminated a small amount of wasteful tax credits, and hiked taxes somewhat on retailers by eliminating the state provision to pay for them acting as sales tax collectors for the state in a timely fashion.
It also came weighed down by a series of measures that the GOP faction, self-styled as “budget hawks” because they talk loudly about budget reform without ever actually addressing satisfactorily the issue for the most part, stumped to institute budget process reform at the margins. With one exception, these would be innocuous to helpful in defining the process.
Posted by Jeff Sadow at 11:05