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Problematic attitudes hamper fixing LA budget

Look no further for why Louisiana’s legislators submit to tax increases rather than inducing enhanced fiscal rationality into the budgeting process than recent remakes regarding bills that would impact the issue of dedicated funding.

During a recent meeting of the Louisiana Wildlife and Fisheries Commission, a representative from the Department of Wildlife and Fisheries complained about measures that would allow redirections of more money from several dedicated funds that funnel money to the department or abolish these funds entirely. In the convoluted world of Louisiana bureaucracy, the Commission deals with policy in the form of rulemaking, licensing, regulation, enforcement, and adjudication, while the Department deals with all other administrative matters including budgeting, personnel and legal and public representation.

Redirection or abolishment from two funds, the Artificial Reef Development Fund and the Conservation Fund, particularly concerned the Department. The former collects donations from oil producers decommissioning platforms where instead of spending to remove them these may stay offshore by coughing up half that projected charge to the state, while the latter captures revenues from a multitude of sources, mainly licenses for outdoors-related activities and sales thereof, fines, fees from prestige license plates, and mineral royalties from state lands. The former contributed about one-sixteenth percent of the Department’s budget, while the latter constituted just over half.

At first glance, one might wonder how the former might need to produce $11 million just to take care of the 400 or so platforms made into reefs. But the Constitution and statute allows broad definition of the use of the funds. For example, these permit “maintenance” as a covered cost, but does that really need millions a year spent to do the basics? And both permit two special uses of the money, for the state’s wild seafood certification program and for its inshore fisheries habitat enhancement projects, up to ten percent each of the fund. Do each of these initiatives really need a million bucks a year spent on them?

Maybe, maybe not, but nobody knows. That’s because as a dedicated fund – in fact, constitutionally protected from any other use except under deficit conditions courtesy of a recent amendment – this status grants these uses exemption from prioritization. The same goes for the Conservation Fund, which generally and broadly funds any Department activities. And while fees and fines from activities related to wildlife and fisheries makes some sense as revenues gathered to expend on departmental activities, dedication also cordons off oversight to judge the appropriateness of some charges. For example, is state mineral royalties at leasing of $15 an acre an appropriate amount to pay for the Department’s costs associated with activities surrounding that land?

Unfortunately, the Department is perhaps the worst example of state government by autopilot, with over two-thirds of its $174 million budget coming to it by statutory dedication, the highest percentage of any state department except the Public Service Commission, which has entirely regulatory functions, with the nearest others at about half of their revenues also having much heavier regulatory/legal burdens than Wildlife and Fisheries. Most of the rest of its budget comes from federal funds, and none from the general fund.

Department representatives whined that the possibility that the success in particular of SB 214 by state Sen. Mike Walsworth, which would amend the Constitution to wipe out all constitutionally-protected funds, would force their agency have to compete for general fund monies. In other words, shorn of the protective shield that allows money to roll in automatically, it worries that, considering needs of other parts of government, lawmakers could think higher education, health care, or other functions relatively more important than using a certain number of personnel to maintain artificial reefs in the way to which the Department has become accustomed.

Worse, the Department cannot even spend all the money in these funds. As of the end of the last fiscal year, over $7 million flowed into the Artificial Development Reef Fund but even with the expenditures it still had over $17 million left at year’s end. The Conservation Fund engorged over $104 million and ended up increasing its balance to $132 million. Thus, about $150 million above and beyond requirements for spending over the years sits idle while next year’s budget has a $750 million hole.

Although this department may serve as the most egregious example of protection from justifying need, Louisiana lurches from one set of budget difficulties to another because so many other, if lesser, examples exist of exactly the same condition that diminishes accountability and increases irrationality in setting priorities and making choices. With almost seven-eighths of the budget blocked off in some fashion, this tempts all too easily policy-makers to take the path of least resistance and raises taxes when low-priority items have abundant funding while those of higher priority starve.

It’s not, as the Department put it, “disastrous” that guaranteed funding disappears, if replaced by a system that reviews the appropriateness of fees relative to actual department costs tied to those for a service level agreed upon by policy-makers, with any surplus or additional funds from the outside up for grabs across the entirety of state government. Rather, it’s much sounder fiscal management – something Louisiana sorely needs.

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