Louisiana Spotlight: With weeks remaining in term, Bobby Jindal shows up at home, expecting praise _lowres

Advocate staff photo by BILL FEIG -- Gov. Bobby Jindal answers questions at a press conference in front of the Governor's Mansion about his decision to drop out of the U.S. Presidential race, the state budget deficit, Syrian refugees coming into the state and other topics.

Echoing criticisms the gubernatorial candidates had about Gov. Bobby Jindal’s financial stewardship, influential New York City credit rating agencies have disapproved of the administration’s solution for rebalancing the state’s budget.

But Jindal would have none of it.

“This wasn’t by accident,” Jindal said in an interview Thursday when asked about what critics — particularly other politicians — routinely call a crisis.

“We intentionally went about reducing the size of government,” Jindal said, adding that he felt the only alternative was to raise taxes, which would have taken money out of the pockets of families and would keep businesses from wanting to expand.

Jindal pointed out that he reduced the government workforce by 30,000 and balanced state budgets every year, which is required by the state constitution, without raising taxes. He went into every budget year proposing more spending reductions than he said legislators were willing to accept.

“This is the difference between campaigning for governor and governing: You don’t always get everything you want,” Jindal said, addressing the criticism directly rather than through aides, which is how he has handled it in the past.

Moody’s Investors Service stated in a commentary released Friday that Jindal’s “balancing plan does not address years of unresolved structural budget deficits that have collided with a weakening state economy and a sharp drop in revenues. …”

Both Moody and Fitch Ratings Inc., which released a similar report last week, said the recent budget balancing relies almost entirely on sweeping funds of excess money, delaying payments to vendors and other actions that don’t produce revenues year after year.

“The recent solution to the deficit is another gimmick,” state Treasurer John N. Kennedy, a frequent critic of Jindal’s financial administration, said in an interview. “They’re more polite in the way they are articulating it, but this is what I hear the credit rating agencies saying: ‘We’re not fools. We know you’re using gimmicks.’ ”

Commissioner of Administration Stafford Palmieri issued a statement late Friday that said, in part, “Louisiana’s credit ratings are currently the strongest they have been in two decades.”

Tax collections — particularly corporate and severance — are coming in $370 million less than predicted when the state spending plan for this fiscal year was drafted. On top of that is another $117 million of, basically, unpaid bills left over from the last fiscal year.

The Louisiana Legislative Fiscal Office calculated Jindal’s plan cut only $22.9 million from the state’s expenses to help close the $487 million deficit.

Jindal’s plan relies on postponing payments to the doctors, hospitals and other providers of health care to the needy under Medicaid and a $28 million withdrawal from the state’s rainy day fund, among other ideas. “Fitch believes these one-time actions do not address the persistent underfunding of the state’s Medicaid program and other state expenditures, such as higher education tuition system,” Fitch Ratings wrote in its report.

Legislators criticized, but approved, Jindal’s plan, following Senate President John Alario’s argument that lawmakers could revisit the issue in a special session. Gov.-elect John Bel Edwards plans to call the Legislature into session after Mardi Gras to deal with budget problems.

The transition team Edwards put together to look at budget issues has met twice behind closed doors, taking testimony and considering alternatives, said Public Service Commissioner Foster Campbell, D-Bossier Parish, who is co-chairing the effort. The group plans to produce a report in the next week or so.

Kennedy worked for former Gov. Buddy Roemer in the 1980s when he faced a fiscal crisis.

Kennedy said what Roemer did back then should be the first thing Edwards should do — look at statutory dedications, which is money legally required to be spent on specific projects and services. Freeing that money from the dedications would allow those funds to be used on other government services.

He said 156 of those funds are protected by everyday law, rather than in the state constitution, and aren’t a fee paid by users of a specific service.

Those dedications could be eliminated and that would free up about $488 million that could be used to fund unprotected expenditures, such as those for higher education and health care.

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