The Gov. Bobby Jindal Administration and his leadership allies in the Louisiana Legislature took a route of convenience regarding a court ruling about the practice of “funds sweeps,” leaving for the future the task of correcting an errant court ruling with no practical impact for the present.
Louisiana has hundreds of funds
to which dedicated revenue streams flow – most relatively small and obscure, a
few large and almost as obscure. They hold billions of dollars, but some of
them collect revenues far in excess of actual spending needs. Although
theoretically appropriations could be made for their dedicated purposes, in
many instances there is little to no genuine reason for that spending, and certainly
other things are of much higher priority, so rather than spent wastefully it
piles up.
Therefore, given the choice
between letting this money lie idle or using it for important objects, the
state may legislate a “funds sweep,” meaning a law is passed that transfers
money from these funds to another fund where it can be used for general
purposes. It’s a safety valve for the lack of courage of too many legislators
that refuse to unlock so many inefficient dedications that steer money to the wrong
places and/or takes it from the citizenry in various forms for lack of a good
reason in the first place, because instead of having to make choices and live
with their political consequences, for political cover to avoid this these
politicians claim they can’t do anything about it because funds are “dedicated”
and then must launch into the necessary corrective of funds sweeps.
In 2012,
one such fund, the Adult
Probation and Parole Officer Retirement Fund, in a sweep got about $3.7
million sliced from it for fiscal year 2013. Proceeds into it come from a
processing fee for supervision paid by those on parole and probation. Collection
began in 2009, with the purpose being to build up a nest egg to enhance
benefits of parole and probation officers.
This perturbed a nonprofit organization,
the Louisiana Probation and Parole Officers Association, an Internal Revenue
Service 501(c)(4) entity, which interestingly lost
its tax-exempt status the previous year for failure to file required forms.
It sued the state over the sweep of this fund. And late
last year, District Judge William Morvant (fresh off a losing
bid for the Louisiana Supreme Court, and with a history of questionable conduct
and head-scratching
rulings) issued a tortuous, if not decidedly bizarre, ruling favoring the
group’s position.
In essence, Morvant argued
against the prevailing notion that defining the origin of revenue occurs not at
the time of physical collection, but when it gets used. He ruled that because the
money got swept, it changed its purpose from a fee when collected to a revenue-raising
“tax” levy, and because this happened in an even-numbered year,
it served as an unconstitutional raising of taxes!
It’s hard to know where to begin
with this gobbledygook. So sweeps therefore are constitutional if done in
odd-numbered years? Note that by this logic, any contributions that came into
the Budget
Stabilization Fund because they were revenues realized above forecasts or might
have been put there by the Legislature from fees collected suddenly become a
tax increase when swept under the special rules governing that for use in the
general fund? And these are just the obvious absurdities derivable from the
faulty conclusion.
Which if brought to a higher
court easily would be uncovered and dispatched as case law as long as those
judicial organs felt no need to rewrite the Constitution or to take leave of
common sense. But the Legislature and Jindal Administration deferred,
having already spent the money, which will require a separate legislative appropriation
to return that seems likely to gain thier assent and given the state’s fiscal picture,
with legislative leaders saying they didn’t want to waste more time and money
on the matter.
Because in the end Jindal and his
allies win regardless. For let’s say the bill passes and the money returns to
the fund. Its enabling legislation, if sweeps now are off the table, says the
cash must sit there awaiting the day the Legislature – needing Jindal’s assent
unless it can muster a two-thirds majority to override a veto – appropriates money
for enhancing benefits of parole and probation officers. Except that there’s a
time limit on it: if not done by Jun. 30, 2015, with Jindal in office six more
months, it all reverts to the Department of Public Safety and Corrections to
fund supervision. In other words, the
Jindal Administration gets the money anyway.
So the reason the appeal was
dropped is not because of fear of losing the case, but because by the time it would
work its way through the judiciary, the Jindal Administration, absent some
unusual resistance in the Legislature, will have the money regardless. And
there will be no other suits trying to reverse other sweeps not because of some
executive branch pressure, as the group’s lawyer maintains, but exactly because
the group won this one on a fluke that others know is far less replicable in their
cases.
Sure, some kamikaze lawsuit attack
on sweeps might occur (one other pending
ruling, that of a case against sweeps brought by the Public Service
Commission, relies partially on this argument, but it has others it could use
that on the surface seem less capricious), but the judiciary should swat that
away as long as it relies upon the confused lower court ruling here. This is
why, in the final analysis, this capitulation will create no change in the way
funds sweeps get used.
2 comments:
Most powerful or 2nd most powerful gubernatorial position in the country. LA's Governor, no matter who it is, is able to rule almost like a state dictator.
Yet, according to Jeff SADow, it's always the Legislature's fault for any negative occurrence in Baton Rouge. For always with his head in Bobby Jindal's lap.
Professor COCKALORUM:
Apology at its worst!
Another unconstitutional court ruling against this Governor.
With his track record (has he won any?), I would be afraid to appeal too.
Congratulations to you, again, for finding him the winner in this!
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