Toward the end of last week, state agency heads started getting word from the Jindal administration about the budgets their agencies can expect next fiscal year.
The word isn’t good.
The Jindal administration is talking about cutting up to $300 million from state support to colleges and universities — that calculates to about $1 billion in higher ed reductions since Gov. Bobby Jindal took office in 2008 — and hacking another $200 million or so from health care. State agencies are looking at 15 percent to 20 percent removed from their budgets, which could translate into furloughs and reduced services.
“It’s going to be bad,” said state Rep. Patricia Smith, D-Baton Rouge, a member of the House Appropriations Committee, which will grapple with the budget proposal that Jindal is required to submit next month. Legislators take the governor’s proposition, tweak it some, argue about it a lot, then in about six months, pass pretty much the same plan into a law, authorizing government to spend the money starting July 1.
Smith’s disappointed that Jindal won’t come off his position against raising taxes or eliminating tax credits to fill a budget deficit that could be $1.4 billion or $1.7 billion or even $2 billion, depending on who you talk to. “We’re going to end up placing fees and all kinds of things on ordinary citizens, just so” Jindal can say on the presidential campaign trail that he didn’t raise taxes, she said.
For years, Legislatures and the governors with whom they serve cobble together operating budgets based on resources that might not be available the following year. They sweep up money raised by agencies. They run found dollars, like from legal settlements, through various funds to circumvent the legal prohibitions against using one-time money on expenses that recur year after year. They formulate all sorts of maneuvers to make up the shortage of revenues.
Then, everyone sits back and hopes that revenue picture starts looking better.
But after years of coming up short — and doing all manner of financial hocus pocus to balance the budgets — the options this time are far fewer, says Jan Moller, director of the liberal-leaning Louisiana Budget Project, which researches tax policies.
The price of oil, as low as the prices are projected to be over the next year, doesn’t look likely to save the day. The little pools of money scattered around state government have pretty much dried up and all the agencies have been cut several times already, Moller said.
“They’re going to try to mitigate whatever they can for higher education and for health care, too,” said Barry Erwin, head of Council for a Better Louisiana, another member-funded policy advocacy organization.
The entertaining antics, for which Louisiana’s Legislature is famous, ought to be kept to a minimum. “The message really needs to be that our Legislature really needs to focus on this budget situation and manage it in whatever fashion we can to get through this,” Erwin said.
To fill the gap, the administration’s budget officials and legislators might tap into the rainy day fund, as they have a couple of times in the past few years. There’s talk of suspending tax exemptions, but that’s also fraught with legal issues, as well as political ones.
Maybe even another tax amnesty — that would mean four of them in the eight years Jindal has been governor — could raise immediate money from people and corporations who haven’t paid their taxes.
House Speaker Chuck Kleckley reportedly counseled patience to Blueprint Louisiana, an advocacy group of businessmen and professionals. Any effort to systemically restructure Louisiana’s budgeting process, which would address revenue issues long term, realistically has to wait for the elections later this year that would choose a new governor and new legislators.
Three of the four candidates for governor said Friday that, if elected, they would call a special session soon after taking office in 2016 to take care of these systematic budget issues.
In the meantime, the budget game for 2015 is beginning, said Robert Scott, who heads the Louisiana Public Affairs Research Council, a membership-funded policy research group.
If history provides any guide, then the first phase is to scare everyone with the possibility of shutting down institutions and laying off employees, Scott said. Then, with everyone terrified, some of the ideas that under normal circumstances should be ignored suddenly become viable.
“The level of anxiety is higher this year than in the past,” Scott said. “Long-term solutions, a better structure, that’s the way to go. But I think what you’ll end up with will be some fixes to get by for this budget. But I’d like to be proven wrong. Please prove me wrong.”
Mark Ballard is editor of The Advocate Capitol news bureau. His email address is firstname.lastname@example.org.
and is on Twitter @MarkBallardCNB.