Inside Report: Spending amnesty money

A few months ago, legislators seized upon a not-so-novel idea for generating money. They decided to give taxpayers an incentive for settling their tax disputes with the state.

The state trots out a tax amnesty program reducing interest and waiving penalties in exchange for full payment every few years. Even though the state last offered one in 2009, a lot of money was up for grabs in 2013. Delinquent tax billings totaled $1.4 billion. Another $1.1 billion was tied up in litigation or disputed audits.

The latest amnesty program achieved its goal of producing $200 million for health care expenses. Then it went one better. It produced more than $200 million — $435 million to be exact. Don’t expect the governor and legislators to swiftly start spending it. First, they have to decide how it should be spent, and harmony on state spending decisions comes from a poorly tuned piano these days.

The excess dollars have all kinds of strings that could tie their use into knots. In the past, legislators have been very adept at untangling the snarls, as state Rep. Joel Robideaux pointed out in a recent letter.

Basically, a good deal of their use is supposed to hinge on a state panel’s determination of whether the dollars are likely to pop up in the state treasury year after year. If they’re nonrecurring only likely to materialize once they’re supposed to be socked away for a rainy day and spent on paying down debt, sprucing up college campuses, funding road projects and restoring the coast. If they’re recurring, a portion will need to be used for the revenue department’s expenses in running the program.

Robideaux, R-Lafayette, was the legislative sponsor of the latest amnesty program. In his letter, he commended the state Department of Revenue for a first-rate website, solid communication with taxpayers and excellent administration. He told legislators in his letter that a little creativity directed half of the amnesty money designated as nonrecurring in 2009 into the state budget.

Money went into a coastal restoration fund, but it was quickly withdrawn and spent on health care.

“The bottom line is that all of the $482 million in (2009) amnesty proceeds eventually ended up in the operating budget,” Robideaux wrote.

The purpose of the letter was to give legislators a history of amnesty programs and explain the steps needed to spend the current proceeds. “I hope you found it informative,” Robideaux wrote in his conclusion.

Earlier this week, after attending a ribbon-cutting at Our Lady of the Lake Regional Medical Center, Gov. Bobby Jindal said he would like this year’s excess amnesty money to go to higher education and health care, his two favorite areas of the budget. He demurred when asked for specifics on how the money would be plugged into those areas.

“Let’s see how many dollars there are,” the governor said. “Secondly, let’s actually sit down and work with the legislative leadership. There are a lot of steps … My point is that ultimately those dollars should end up in education and health care. I think those are the two best investments for our state.”

State Rep. Brett Geymann, R-Lake Charles, said he is not a fan of accounting tricks that put nonrecurring dollars up for grabs in the state budget when they should be used as the state constitution dictates.

“I would like to see us avoid the gimmicks of the past where we have simply used the Coastal Fund to move the money to eventually be used on recurring expenses,” Geymann said.

The amnesty dollars exist because legislators like Geymann bucked the governor on this year’s $25.4 billion state spending plan.

They rewrote the governor’s budget and came up with programs like amnesty to patch it together. They reduced the budget’s reliance on one-time dollars for expenses that must be met year after year. Using amnesty for ongoing expenses in higher education and health care isn’t likely to be well received by pockets of the Legislature.

State Rep. Jim Fannin, D-Jonesboro, said Jindal may need to realize that restrictions exist to tame the spending of amnesty dollars this time.

“It’s going to be some different hoops than what the governor’s had before,” Fannin said.

Michelle Millhollon covers the state budget for The Advocate Capitol news bureau. Contact her at mmillhollon@theadvocate.com.