Inside Report: Lawmakers lack budget solutions

Senator Karen Carter Peterson
Senator Karen Carter Peterson

In an early morning conference call Wednesday, Democratic leaders in the Legislature leveled criticism at Gov. Bobby Jindal and his state budget skills.

They complained about higher education needing loans from the state treasury to pay the light bills until expected revenue materializes. They criticized the governor’s hospital privatization plans, basically saying, “I told you so” on the federal government rejecting the plans’ financial structure. They accused the governor of racking up frequent flyer miles instead of rolling up his shirtsleeves and focusing on the state’s budget woes.

Where the leaders were lacking was in suggesting alternative revenue solutions.

State Sen. Karen Peterson, D-New Orleans, and state Rep. John Bel Edwards, D-Amite, proposed a special session. Exactly what the agenda would be — other than a vague call to study the state budget — is unclear.

What Peterson and Edwards do know, they said, is that not enough time is left in the current session to resolve the situation.

“How do we fix this in the next nine days? I don’t believe we can,” Edwards said.

Over the years, Democrats have offered solutions. They’ve suggested the state should accept an expansion of the Medicaid program. The governor and their colleagues have soundly rejected that idea.

Another idea is to increase the state’s tobacco tax. Jindal flirted with that proposal as part of a broader tax package. Otherwise, he’s opposed to an increase, and he holds the veto pen.

In fairness, legislators don’t seem to care for the governor’s money-saving ideas either.

Jindal agreed to pay Alvarez and Marsal $4.2 million last year to find $500 million in savings across state government. A final report was due in April. Now it will be ready this month, although some ideas already are packed into the $25 billion state operating budget for the upcoming fiscal year that starts in July.

Members of the state Senate Finance Committee — Republicans and Democrats alike — spent a beautiful Friday in mid-May shredding $74 million in savings ideas suggested by Alvarez and Marsal. Legislators don’t want to shorten the hours of a Cameron Parish ferry. They certainly do not want to close 18 Office of Motor Vehicles branches.

Many legislators seem to feel the state would have been better served by saving the $4.2 million for the contract itself. “Not many of the ideas were theirs anyway,” state Sen. Dan Claitor, R-Baton Rouge, complained Wednesday on the Senate floor, echoing suggestions that Alvarez and Marsal simply picked the minds of state workers.

Meanwhile, a look at the state’s accounting ledgers less than two months prior to the end of the fiscal year is an ugly picture. One account — called the overcollections fund — still lacks $148 million in expected revenue, according to figures from the state Treasurer’s Office.

A whopping $97 million isn’t supposed to materialize until the so-called “13th period,” basically a ghost period that comes into play after the books for the fiscal year close. The fiscal year is supposedly closed for business, but the state still accepts revenue payments.

Looking at the overcollections balance sheet in late April, Laura Lapeze, of the state Treasurer’s Office, reached out to the Jindal administration about when higher education’s loans might be repaid. “Can you provide me with a schedule of your anticipated inflows?” she asked in an email to Barry Dusse, one of the governor’s budget advisers.

Dusse told Lapeze not to worry. “Remember, it is one big pot: the overcollections fund. This is not anything new.

“Another thing that I have not looked into yet is reduced expenditures. Historically, not everybody spends everything appropriated,” he wrote on April 29.

Weeks later, the Treasurer’s Office says the shortfall in the overcollections fund hasn’t budged.

Commissioner of Administration Kristy Nichols said two hospital lease payments will be made in June. She said the Attorney General’s Office has $70 million in hand for the overcollections fund. She said two property sales are wrapping up.

In other words, much ado about nothing, according to the Jindal administration.

Michelle Millhollon covers the state budget for The Advocate Capitol news bureau. Her email address is mmillhollon@theadvocate.com.