It’s fair to say that Gov. Bobby Jindal had a pretty rough week.
His budgeting practices were savaged by national media from coast to coast. He received “three Pinocchios” — on a scale of four, meaning “significant factual error and/or obvious contradictions” — from The Washington Post on the way he spun budget figures.
Then came grilling by the big three New York financial analyst houses making noise about lowering the state’s credit rating.
The culprit, everyone seems to agree, is the Jindal administration’s reliance on “one-time” or “nonrecurring” money — legal settlements, property sales and other ad hoc windfalls — to pay operating expenses that recur every year.
“That is like using your credit card to pay your mortgage,” Jindal said back in 2008 when he took office and there was a surplus — and he wanted to criticize how his predecessors cobbled together their budgets, using pretty much the same techniques.
Now Louisiana legislators and the administration, which will release its last budget proposal on Feb. 27, face having $1.6 billion less to spend in fiscal year 2016 that begins July 1 for the same level of services the government is providing this year.
“We’ve never had a shortfall due to nonrecurring revenues,” Jindal said last week at a groundbreaking, his first comments after being pilloried by the national press.
Jindal contends — say some close to the budget process, because he doesn’t clearly articulate this in public — that every year is the same: Budget-writing season starts off in a panic because some amount of money used to shore up the current year isn’t available the next year. But, after a mélange of accounting maneuvers, service cuts and reallocations of various pools of money that inevitably pop up, then voila, the budget is balanced.
It’s a mistake to look at the spending from the prior year and assume that’s the starting point for the coming year, Jindal said. “We don’t start every year with that assumption.”
Robert Scott, who heads the Public Affairs Research Council of Louisiana, a government policy research group whose board is made up of businessmen and professionals, says budget architects likely will not fund inflation and growth. Those steps will drop the gap to about $1 billion, maybe a little less, of revenues lawmakers will need to find.
“Whether you call it ‘one-time’ money or not, I don’t care. The point is you’re budgeting with money you won’t have next year,” Scott said, adding that the Legislative Fiscal Office goes through each year’s budget and says here’s the money we have in the budget this year that we don’t have a replacement for next year.
“There’s nothing fictitious at all about the Legislative Fiscal Office’s list of those types of infusions into the budget,” Scott said.
“We need to stop the happy talk,” said state Treasurer John N. Kennedy, who spent his week trying to persuade New York financial analysts that the state would wean itself off “one-time” dollars.
The rating services, all three of which maintained Louisiana’s credit rating, for now, raised cautions about the future, Kennedy said.
Add all that up, and you get a harsh reduction in state support for higher education and health care, along with significant cuts to state services.
This year, Jindal is looking at keeping the dollars from tax exemptions and credits that refund the taxpayer more than that individual or corporation owes in taxes. The state would keep money above what is owed and not write a check for the additional amount, as it does now.
The administration also is looking at “efficiencies,” which is government-speak for budget cuts. Commissioner of Administration Kristy Nichols says the spending at every agency will be cut and most will be less than 15 percent.
But, as Jan Moller, of the Louisiana Budget Project, a group that studies the impact of tax policies on low- and moderate-income people, points out, more than 30,000 state workers lost their jobs, a thousand fewer professors are teaching at the state’s colleges and universities, the list of highway needs continues to grow, basic maintenance is being postponed, lines are longer at the Office of Motor Vehicles, child protective services have been cut and the State Library is open only two days a week, to name only a few curtailed services.
“Bobby Jindal has been governor since 2008. He’s had seven years to tell us and has had numerous streamlining commissions and hired a lot of consultants, all of them looking at the size and scope and shape of state government. And if it hasn’t been cut yet, I’m waiting to hear what else he thinks we can do without,” Moller said.
Mark Ballard is editor of The Advocate Capitol news bureau. His email address is email@example.com, and he is on Twitter, @MarkBallardCNB.