Legislators have a hard time putting the interests of the state as a whole ahead of their particular and parochial interests. Even so, given a looming $1.6 billion shortfall in the state budget, lawmakers should take a hard look at the widespread expedient use of state dedications. These dedications allow state money to be spent pretty much on autopilot each year, free from the kind of scrutiny that should inform any meaningful budget process.
Studies by the Legislature itself earlier in Gov. Bobby Jindal’s term and by the governor’s staff in an ill-fated tax overhaul two years ago identified dozens if not hundreds of cases where state dedications have run amok. The so-called “stat-deds,” or statutory dedications, are established in law to spend money on particular purposes, many of them worthy but few that cannot be accomplished through a regular budget process.
And because the spending is locked in by law, the need for a particular parish’s education fund, for example, is never assessed against the budget cuts for LSU, or cuts to hospitals, or even other institutions in the same parish. The money in some stat-deds comes from carve-outs of the general fund.
Despite what legislators emphasize, to show themselves powerless to fix the dedications, the funds are not locked into the Louisiana Constitution. Many opportunities to trim state spending lie in these autopilot funds, if a majority of legislators agree to abolish or reduce them.
Are we going to end the fiscal crisis session with just as many stat-deds as we started with?
Trouble is, the stat-deds are established for political reasons, and it would take political will to cut them back.
State Treasurer John N. Kennedy has long been in favor of pruning the stat-deds, citing some that protect grants for specific filmmakers, funds to fight pet overpopulation and money for the board of massage therapists.
Kennedy said there are good reasons to keep state dedications funded from industry fees. A much-cited boll weevil eradication fund is assessed by farmers on themselves, so it makes sense to allow the industry to continue to do that. It’s the state dedications paid for through the general fund that should be targeted.
Kennedy was a top aide to Gov. Buddy Roemer in 1988, when the state last faced a budget crisis of this magnitude. He said the administration and a special session of the Legislature agreed to do away with all general fund dedications, and then have the lawmakers look at them as they applied for reinstatement.
“If you try to do it one by one, the constituents for each one lobby hard,” he noted. “That’s not going to work.”
We agree with the Louisiana Association of Business and Industry’s Stephen Waguespack. He noted that “a large portion of those (general fund) dollars are not easily usable in times like this due to a budget locked up in restricted uses and dedicated funds.”
Probably, the Legislature would still grant short-term relief through the budget for many of the intended purposes of the funds. But at least the new governor and Legislature in 2016 would have a clean slate to work with. Advocates of funds reapplying for a dedication could be scrutinized.
We face a crisis akin to that of 1988, but it’s not clear there is the political will to make good use of it.