One way to help close Louisiana budget gap: Lawmakers eye contracts for savings _lowres

Treasurer John Kennedy describes some of Louisiana state agencies' contracts on Monday, Feb. 22, 2016, in Baton Rouge, La. (AP Photo/Melinda Deslatte)

Louisiana legislators, desperate to find ways to cut the budget before looking to new revenue sources, are pushing for the state’s contracts to be reviewed, with the aim of cutting contracts that are inefficient or outdated.

The House Appropriations Committee agreed to two proposals on Monday: One would require a 15 percent cut in the total value of contracts the state has. The other would require the governor’s administration, the commissioner of higher education and statewide elected officials to review all of their contracts and justify the need for them. Both measures are now heading to the full House for consideration, before they move to the Senate for approval. The special legislative session is scheduled to run through March 9.

It’s unlikely that the contract maneuvers will lead to significant savings in the current budget, but several Republicans, uncomfortable with Gov. John Bel Edwards’ proposed tax hikes, have been looking for ways to signal to constituents that they are serious about scaling back the budget.

“Because of the extraordinary times that we are in, we are going to do as I do in my business, which is start from the bottom and work our way up,” said Rep. Lance Harris, R-Alexandria.

State Treasurer John Kennedy, a Republican running for the U.S. Senate, has repeatedly called on legislators to review contracts for savings as they face a $900 million shortfall in the current state budget and $2 billion shortfall in the budget that begins July 1.

During the House Appropriations meeting on Monday, Kennedy rattled off several that he said could be rethought, including private firms that have been hired to perform tutoring services, marketing and team building within state departments.

“If you spend four or five hours looking at these contracts, they are gonna make you throw up,” Kennedy told the budget panel.

Kennedy said the state, as of November, had nearly 15,000 professional, personal and consulting contracts worth $21.3 billion.

More than half of Louisiana’s state contracts with outside entities do not have to be approved by a centralized authority in state government — totaling nearly $6.2 billion in taxpayer dollars, according to an audit released last year.

Edwards, by executive order, has instructed all agencies, boards commissions and other budget units of the executive branch to review all professional, personal and consulting contracts to look for ones that can be eliminated or reduced.

“It’s time we take a stand and legislate and get something done with these contracts,” said Rep. Dee Richard, No Party-Thibodaux, who pushed for the 15 percent reduction.

Harris’ resolution, meanwhile, would require the Division of Administration to eliminate contracts or defend their effectiveness before the Joint Legislative Budget Committee next month.

Commissioner of Administration Jay Dardenne, who serves as Edwards’ chief budget architect, questioned how effective it would be to present all contracts to the Legislature’s top budgeting panel.

“We can identify contracts and cancel them” on the administrative level, he said. “We can do that.”

He noted that soon after coming to the Division of Administration, he ended the required use of a travel booking site to save the state money.

“I’m going to take action,” he said. “As soon as we are aware of these types of things, we are on it.”

Follow Elizabeth Crisp on Twitter, @elizabethcrisp.

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