Besides making deep cuts to state agency spending, the Jindal administration has adopted the practice of collecting dollars the offices generate on their own to balance the state’s budget.
Officials in departments managed by appointees of Gov. Bobby Jindal are being closed-mouthed about what they are being asked to do and the impact it could have on state services ranging from health care to education to transportation.
But officials elected statewide say they’re not happy with the impact of the 5 percent spending reductions their departments are being asked to make between now and June 30 to help balance this year’s $25 billion state budget. In addition, for fiscal year 2016, which begins July 1, all have been told to plan for at least a 15 percent cut in spending because of a lack of revenue.
The size of statewide elected officials’ budgets pales in comparison with those of major state departments, which also are being told their budgets will be cut, but the reductions sting nonetheless.
The latest budget-balancing plans expand the administration’s past pilfering of agencies’ self-generated funds — takings that in the past have led to litigation.
There is a pending lawsuit over the administration’s diversion of Public Service Commission funds to other parts of the budget. A Baton Rouge judge has found that the governor should not have taken $3.7 million from a retirement fund for probation and parole officers in a prior budget-balancing effort.
Insurance Commissioner Jim Donelon, whose office operates totally on self-generated funds, said Jindal is essentially “imposing a tax on every policyholder in the state” as he takes dollars paid to regulate the industry for general budget purposes.
“The fees are paid by the agents, brokers, adjusters ... we regulate, and all are passed on to policyholders,” Donelon said. “When that money, instead of being paid for necessary regulation, instead flows through for the general fund, it amounts to a tax on those people and businesses.”
Donelon said Jindal wants $1.4 million from his $32 million department budget this fiscal year and $5 million next year. “It’s going to decimate us,” he said.
Lt. Gov. Jay Dardenne said he may have to cut out-of-state tourism advertising this spring as the administration takes $1.2 million in dedicated tourism promotion dollars to help offset this year’s deficit. The $1.2 million is part of a $3.56 million cut in his $97.9 million budget this fiscal year.
“We have had record-breaking years, with visitors spending more money here,” Dardenne said. “If we spend less, we will generate less revenue for the state from visitors.”
Dardenne’s budget cut for the new fiscal year amounts to $6.4 million.
“It’s a pretty sharp blow for us, as it is for everybody,” he said.
The governor’s budget-balancing proposals also divert revenue generated for state parks to other budget requirements. The money had been shifted from park maintenance to operations in prior budgets.
Secretary of State Tom Schedler said his biggest cut is in state dollars to pay for elections — $2.6 million between now and the June 30 end of the state budget year. He plans employee furloughs — one day every two weeks — starting next week.
“How do we hold elections? There’s not a lot we can do,” he said.
Schedler said he has been told to cut $3.8 million in all — a 5 percent reduction in a $78 million budget. Besides the cut in elections funding, the administration wants to grab $1.2 million in funds the agency collects from fees for services it uses for operations.
Fees associated with corporation filings were increased to fund a “one-stop shop,” allowing startup businesses to go to one place to file necessary paperwork that spans multiple state agencies. Now that project is in jeopardy, Schedler said.
In the fiscal year that starts July 1, a $7.6 million reduction is required from his office, he said.
Schedler said budget reductions over the past three or four years “look like kindergarten” compared to what he is being asked to do for the remainder of this fiscal year and into the next.
“We are already down to the bone. We are going down to bone marrow,” he said.
Agriculture Commissioner Mike Strain said he and other statewide elected officials have constitutional and other legal mandates that they may not be able to meet if the administration plans go ahead. He said the administration wants to take money from fees and statutorily dedicated funds — some of which have not yet been collected and may not materialize.
“I’m going to fight as hard as I can,” said Strain, whose department is facing a $2.6 million reduction between now and June 30. Next fiscal year, Strain’s target cut is between $3.8 million and $5.2 million, or 15 percent to 20 percent.
He said he already has lost half of his department’s employees from prior budget cuts — from about 1,000 employees down to just over 500 — and is functioning on a bare-bones $73.6 million general budget.
“At the same time, the sector we regulate has doubled,” he said. “We are at that thin, red line. Further cuts will mean we will not be able to guarantee the health and safety of our citizens.”
Strain’s department checks every gasoline station in the state at least once a year, plus food processing facilities and weight scales at grocery stores. It conducts meat inspections and regulates fertilizers, the milk industry and pest control operations. It also delivers commodities to public schools and has firefighting units.
State Treasurer John Kennedy, whose office operates on self-generated funds, said the 5 percent cut in his budget translates to $491,000 out of a $12.4 million budget in the current fiscal year. He’s been told to prepare for a 16 percent cut in the fiscal year that starts July 1.
“We are going to do it,” Kennedy said. “Obviously, it will hurt because we run a lean operation. ... I’m not surprised this day has come from what’s happened in the last four or five years. The state did not make the changes it needed to make, and we are paying the price.”
Attorney General Buddy Caldwell did not agree to be interviewed for this story. His office said efforts are underway to cope with a $1.63 million reduction in the current fiscal year — $704,695 in state dollars, $335,350 in self-generated funds and $596,034 in statutory dedications. Next fiscal year, a 16 percent cut will translate into a $2.19 million reduction.
Follow Marsha Shuler on Twitter, @MarshaShulerCNB. For more coverage of the state capitol, follow Louisiana Politics at http://blogs.theadvocate.com/politicsblog.