GOP leaders of the Louisiana House of Representatives are right not to throw caution to the wind.
A bipartisan spectrum of big spenders panned them in November when that chamber’s representative on the state’s Revenue Estimating Conference, Appropriations Committee Chairman Cameron Henry, vetoed recognition of an increased revenue forecast. All panelists must agree to make these kinds of changes.
Other state leaders, including Republican Senate President John Alario and Commissioner of Administration Jay Dardenne, a Republican who ran against his Democratic boss Gov. John Bel Edwards, insinuated that Henry — pinch-hitting for GOP Speaker Taylor Barras — voted that way not for practical but political reasons. They pointed out that economists from both the Edwards Administration and Legislature predicted the state would collect about $150 million more this fiscal year than previously anticipated.
A supplemental bill passed this year permitted about $43 million more in spending, largely tied to Edwards’ overhaul of criminal justice sentencing and administration, if recognized revenues grew enough before year’s end, although this approval wasn’t the first time lawmakers have ignored the state constitution's provision against contingency appropriations.
But Henry’s beef concerned the projection of higher oil prices averaged over the fiscal year, which was used as the justification for the rosier revenue forecast. He noted that recently, the price of oil had begun to slide.
And it kept going down. Wanting to get the extra money, Edwards and Alario pushed for another REC meeting for the middle of December. By then, the federal government had lowered its 2018 price estimate and cut its 2019 estimate, too. For the December meeting, state economists reduced their price prediction a little as well, leaving their estimated revenue increase in the $130 million range.
However, citing continued market volatility, Barras said he wasn't encouraged to reverse Henry’s decision. Wisely so; lately, the benchmark price has fallen several dollars below the 2019 federal government estimate. If that holds throughout the first half of next year, it would validate the price used in the original REC forecast of six months ago.
Simply put, Louisiana would end up spending $43 million it didn’t have. Barras and Henry acted judiciously in preaching caution, and Barras noted that before the next legislative session, they could revisit the issue and perhaps raise the number, which would permit a supplemental appropriation. Keep in mind that, since 2007, the REC has missed after-session forecasts by an average of around $300 million.
This delay won’t please Edwards, who faces a tough reelection campaign. He wants the higher forecast before year’s end to distribute the goodies now and to bake the increase into next year’s budget, due next month.
Even if oil rebounds sufficiently to justify a higher forecast but official recognition comes late, the House leaders still have made the right call. It’s not that any extra money can’t get spent, and if the supplemental laundry list that loses priority at the end of 2018 stands out relative to all other options, it still will receive funding.
Yet that’s what Edwards doesn’t want. Bad enough that any surplus revives Republican claims that the budget wasn't drowning in red ink like all the Chicken Littles had warned. Worse still, a surplus could set up attempts to roll back this year's sales tax increase, putting Edwards and legislative Democrats during an election year in the awkward position of opposing a tax cut in favor of greater spending.
That’s the real politicization of the process — trying to rush through an increased forecast when prudence dictates otherwise. It’s not GOP leaders, but Edwards and his allies, playing politics.
Jeff Sadow is an associate professor of political science at Louisiana State University-Shreveport. He is author of a blog about Louisiana politics at www.between-lines.com and writes about Louisiana legislation at www.laleglog.com. Follow him on Twitter, @jsadowadvocate or email firstname.lastname@example.org. His views do not necessarily express those of his employer.