Louisiana Spotlight: Gaps start to show in Jindal budget

Cracks are beginning to show in Gov. Bobby Jindal’s state operating budget proposal for next year, and lawmakers, worried that some of the financing seems shaky, are starting to eye areas where they could cut spending.

The House Appropriations Committee has been conducting an agency-by-agency review of the governor’s 2014-15 spending plan for the fiscal year that begins July 1. Several committee members say they don’t like what they’ve seen.

They criticize Jindal’s budget as overreaching with new spending, suggesting it could set up long-term problems for future governors to face.

“We’re digging the hole deeper and deeper,” said Appropriations Chairman Jim Fannin, R-Jonesboro, as he combed through the health care spending plans.

The disagreement is part of an annual struggle between the House and the governor’s office over the best way to finance state government.

If lawmakers in the House want to rework the budget, however, they’d have to find places to cut. That’s always a difficult proposition — and it becomes trickier as the 2015 legislative election year nears.

Mentioned by lawmakers as possibly on the chopping block are $60 million in pay raises for rank-and-file state workers, a $40 million higher education incentive fund and $6 million in new money for colleges that have experienced rapid enrollment growth in recent years.

Of particular sensitivity is the incentive fund. The project is championed by the governor and sponsored by House Speaker Chuck Kleckley, R-Lake Charles, so if lawmakers in the House attempt to dismantle it, that would be controversial.

The fund would direct dollars to high-demand programs that will fill the petrochemical, engineering and manufacturing jobs coming to Louisiana, and it would be the first time in years that a state operating budget steers new money to college campuses instead of taking money away from them. Higher education leaders are pushing for passage.

But those dollars, like the pay raise money, are considered new spending areas, and some lawmakers are questioning if the state can afford to boost spending while budget estimates forecast only modest income growth at best for the state treasury.

Jindal’s chief budget architect, Commissioner of Administration Kristy Nichols, defends the budget recommendations as responsible and balanced. She says they would preserve critical services and enhance spending on education and health care programs.

But just last week, Nichols had to advise the Appropriations Committee that Jindal’s budget overestimated a pool of tax amnesty money available to spend in the Medicaid program. The “calculation error” was pegged at $40 million.

Nichols said other dollars were available to cover the shortfall without making cuts, including money generated by a recent state bond sale.

That’s one problem solved. But committee members, who will make the first changes to the governor’s budget proposal in the coming weeks, have identified a list of areas where they have other concerns.

Questions have been raised about whether the fund balances that the governor proposes to use are available. State elected officials have said Jindal’s budget includes inflated assumptions of revenue generated from regulatory fees.

Fannin said he’s concerned that taking $7 million from a set-aside fund that is generated by assessments on private employers could keep the assessment rate artificially high.

Rep. Simone Champagne, R-Erath, criticized Jindal’s proposal to provide new services to the developmentally disabled with $12 million from the state’s pool of federal recovery money for hurricanes Gustav and Ike. She supports the services, but not the financing mechanism.

Several lawmakers are raising objections to taking $50 million in cash from the New Orleans convention center and replacing it with long-term borrowing paid off with interest.

The Jindal administration has assured lawmakers the dollars the governor proposed for his budget are accessible. They insist the plans represent a proper method for budgeting.

But then there are the concerns about later years, with estimates that Jindal’s budget uses as much as $900 million in short-term financing sources that won’t be on hand a year later.

Rep. John Schroder, R-Covington, said the potential hole looks so big, “I almost wish I wasn’t coming back next year.”

Melinda Deslatte covers the Louisiana Capitol for The Associated Press.