Louisiana Budget

LSU economist Jim Richardson, Senate President John Alario and Commissioner of Administration Jay Dardenne, from left to right, talk ahead of the meeting of the Revenue Estimating Conference on Monday, Dec. 10, 2018, in Baton Rouge. The three conference members wanted to boost the state's income projections, but House Speaker Taylor Barras blocked the changes. 

The state’s own fiscal troubles have gotten in the way of hiring specialists to swoop into financially troubled towns, push aside local elected officials and unilaterally fix the municipality’s finances.

Courts, at the request of state government, appoint financial administrators and give them despotic powers to hire and fire at will, set fees, reorganize departments and do whatever needs to be done to balance budgets and return fiscal order to local governments. But state legislators haven’t put any money into the account that pays these financial whizzes, instead have chosen to spend the capital elsewhere during the past decade or so the state has struggled with its own budget problems.

“I can’t ask someone to work and not pay them,” said Legislative Auditor Daryl Purpera who chairs the Louisiana Fiscal Review Committee that makes the request to the courts.

The committee is seeing more and more municipalities with financial problems and Purpera, whose office audits government entities, says the warning signs his auditors are seeing indicate a growing problem over the next year or so.

Jeanerette in Iberia Parish has an administrator. So does St. Joseph in Tensas Parish.

The Fiscal Review Committee voted Monday to ask the courts to place a fiscal administrator over Clayton, in the central part of the state, and over Clarence, which is near Natchitoches.

Come February, the City of Bogalusa is on the committee’s agenda. Towns like Clinton, a suburb of Baton Rouge, the Acadiana town of Melville, and Union Parish’s Sterlington – whose debt is roughly equivalent to $10,000 for each of the 2,000 residents – will soon be on the list.

In theory, the local governments are supposed to pay the administrator. But Purpera points out that these municipalities come to the state's attention because they are deep in debt. “Unfortunately, by the time we can get involved it’s too late,” he said Thursday.

A Fiscal Administrator Revolving Loan Fund was created in 2014. The idea is for the state to pay the administrator and then the municipality would repay the loan fund after getting back on its feet. Legislators talk about appropriating money to the fund but never has. 

“We need to get something structured properly because this problem isn’t going away unless we as a state decide that these municipalities are on their own,” Purpera said.

Chief Deputy Attorney General Bill Stiles, the member of Fiscal Review Committee in charge of filing the requests with the court, responded Thursday to written questions with a statement: “Since Jeff Landry took office as Attorney General, there have been several municipalities who could not be put under administration because of a lack of funds, so this is not unusual. As someone who shares General Landry’s strong passion for the separation of powers, I recognize it is the Legislature’s job to set financial priorities of the State and the Revenue Estimating Conference’s job to determine how much potential revenue should be recognized.”

The necessary money is available, Commissioner of Administration Jay Dardenne said, if the Revenue Estimating Conference would officially recognize additional money from higher than expected tax returns.

By law the REC decides how much money the state can spend. The REC routinely adopts tweaks as the economic climate improves or depresses. But the four REC members all must agree on the number.

Three have agreed, but the fourth, House Speaker Taylor Barras, R-New Iberia, since November repeatedly has rejected the advice of legislative and administration economists about improved projections that would free up money. He argues that the economy could falter, and the state would end up obligating to pay expenditures that couldn’t be covered in the future.

The REC is meeting again on Jan. 17 to see if they can agree to include the extra revenues in spending plans. If they do, then the Joint Legislative Committee on the Budget, meeting the next day, would have to approve putting the new-found money in the fund to pay fiscal administrators.

Dardenne said the request for that funding is ready to go.

“This is going to reach a crisis point very soon,” Dardenne said. “We need to get those administrators in there.”


Follow Mark Ballard on Twitter, @MarkBallardCnb.