Fearful that rejecting his plan to bridge the deficit gap would give Gov. Bobby Jindal license to whack higher education spending, legislators approved Friday his proposal to cover a nearly $500 million shortfall in this year’s budget.
Both candidates for governor in Saturday’s election — Democrat John Bel Edwards and Republican David Vitter — criticized Jindal’s plan to rebalance the budget and urged legislators to reject it. Under the law, had the Joint Legislative Committee on the Budget failed to approve its part, the governor could unilaterally cut 3 percent.
Commissioner of Administration Stafford Palmieri said the options are fairly limited if legislators postpone approval. The governor would have little choice but to focus his cuts on a limited range of services, such as prisons, services for children and funding for public schools. “Most likely, the unilateral will be used to reduce higher education,” she said.
LSU President F. King Alexander was at the meeting, button-holing legislators. “We really can’t sustain any more cuts and still be viable,” Alexander said.
“We were looking to prevent any more cuts to higher education,” said House Speaker Chuck Kleckley, R-Lake Charles.
Jindal’s plan relies on nearly $150 million in reductions, $28.2 million from the state’s rainy day fund, sweeps of unused dollars and an infusion of new money from different sources, including lawsuit settlements.
But the Louisiana Legislative Fiscal Office calculated only $22.9 million was cut from the state’s expenses.
For instance, Shawn Hotstream, of the Legislative Fiscal Office, said $126 million of delayed Medicaid payments doesn’t qualify as an expense cut under the office’s definitions.
Legislators questioned why the delayed payments were presented as an anti-fraud initiative.
Palmieri said it would give time to verify the accuracy and legitimacy of claims. To do so, the plan is to extend the payment schedule from seven days to 21 days.
Nowhere near $126 million would be collected, contended state Sen. Ed Murray, D-New Orleans, when past anti-fraud efforts had brought in $5 million or so.
“We’re not going to find $126 million in fraud. We’re slow paying these people,” Baton Rouge Republican Sen. Dan Claitor said.
Palmieri said, “It is a cash flow management issue.”
Edwards visited his colleagues in a room adjacent to the hearing room but left before the vote. He discussed Jindal’s plan and what would be taken up in special session if he wins the election. During an interview Thursday, he criticized the proposal for taking $46 million from the Transportation Trust Fund, which is the repository for much of the taxes on the sale of gasoline and the source of funding for maintaining and expanding the state’s roads.
Robert Scott, who heads the Public Affairs Council of Louisiana, said when added together, lawmakers actually have pulled $93 million out of the trust fund this year alone.
While Jindal administration officials will use only state dollars, Scott said the only way to make the numbers work is for the administration to include federal dollars in calculating the size of the fund. The larger the fund size, the more dollars the administration can take out under legal guidelines, he said.
“Here’s what really amazes me about that hearing: Not a single legislator asked a single question about whether this plan was good for highway funds,” Scott said in an interview after the hearing.
Made up of more than 40 members of House and Senate money committees, the joint hearings also attract a couple dozen other legislators, who came to watch the proceedings. A klatch of lawmakers chatting amongst themselves got so loud at one point that Baton Rouge Democratic Rep. Ted James chided them to pipe down so he could hear the debate.
But everyone got quiet when Senate President John Alario spoke.
The Westwego Republican noted that despite all the criticism of the governor’s plan, nobody else had come up with an alternative.
“This is not a perfect plan,” he said, as it only pushes the underlying problem off for a few months. He predicted the new Legislature would tackle this and other problems in special sessions that both candidates have promised to call.
Representatives and senators voted overwhelmingly to approve Jindal’s proposal, with only seven voting against the idea and 33 voting for it.
Opponents made up an interesting mix of Black Caucus members and conservative fiscal hawks.
Democratic Rep. Patricia Haynes Smith, whose district includes the LSU clock tower and Tiger Stadium, voted against approval, saying Jindal took the easy steps, doing only enough to get past his remaining seven weeks in office. “I don’t think he would have gone out with slicing even more off the higher ed budget than he has already. The backlash would have been horrendous,” she said.
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