Political Horizons for Jan. 6, 2013 

Budgeting from Legislature

Within the borders of the Sportman’s Paradise, Gov. Bobby Jindal’s only public appearances have been tightly controlled economic development announcements. Instead, the governor has taken to issuing written pronouncements.

For instance, in an end-of-year essay last week published by small newspapers around the state, such as the Gonzales Weekly Citizen, Jindal wrote that he wants a flatter and simpler tax code.

Exactly what the governor will be pushing remains somewhat of mystery to legislators, many of whom last week said they hadn’t been consulted yet on the details of the proposed tax code overhaul.

But with state government going into the sixth year of financial troubles, Jindal is not the only elected official with a plan. The state again faces a budget gap. This time existing services are expected to cost about $1.2 billion more than the taxes, fees, royalties and other revenue sources will produce in the fiscal year beginning July 1.

Last year, 30 or so conservative Republicans, who call themselves “fiscal hawks,” rebelled at Jindal’s quilt-like stitching together of various funds and accounting mechanisms to balance the budget. The revolt required Jindal’s mandarins to reach out to Democrats to get the state budget passed.

This year, when the Louisiana Legislature convenes April 8, the fiscal hawks will have their own financial package, the details of which they plan to release in the next couple of weeks, according to the group’s leader, state Rep. Brett Geymann, R-Lake Charles.

“We’re close. We’re real close,” Geymann said last week.

The language of the draft is being vetted still, but Geymann can say the bills would address the Revenue Estimating Conference, efforts to increase transparency in the budget-writing process, and other moves that would enhance legislative involvement in deciding how taxpayer dollars are spent.

The Louisiana Constitution requires state government to balance its budget, that is, to spend only what revenues are collected.

The four-person Revenue Estimating Conference, called REC, meets periodically to review the money in the bank and the funds that can reasonably expected to be deposited in the near future. Following prescribed procedures and calculations, the REC identifies just how much money is actually available to spend. It designates how much of those funds comes from a “one-time” source, that is not likely to be repeated in the future, such as federal stimulus money, versus what funds come from “recurring” sources, such as taxes, that state government can count on next year.

The law forbids using “one-time” money to pay expenses that recur year after year.

Geymann said that the REC often fails to adequately identify “one-time” monies and recurring revenues when it “recognizes” how much money is available to spend.

“I don’t think it is even necessarily intentional that we’ve done that. It’s just the way we’ve always done it,” Geymann said. “We’re trying to address some of that and lay it out in a way that we believe will correct some of the issues that come up every year.”

The ultimate goal for the REC proposal and the other planned measures is to refine the budget process so that more people know what is going on within the budget.

“I’m very pleased to see legislators, including but not limited to the fiscal hawks, really taking a more-active role in crafting a budget and how we spend our revenue,” said State Treasurer John N. Kennedy, through whose hands all state monies flow. “But I would like to see our Legislature get more involved in terms of understanding what’s in it and changing what they don’t like.”

Kennedy echoes Geymann on the need to clarify REC functions as one way to limit the use of “one-time” money to balance the budget.

The state constitution gives the governor the task of producing an annual spending plan, Kennedy said. But legislators have — and should use — their power to shape the state budget and not just tinker around the edges.

Kennedy added: “If you can’t sleep one night, sit down and read the Louisiana constitution. It is abundantly clear that the Legislature has more power than the governor. The fact that the governor, in reality, has more power than the Legislature is not by act of law; it is by act of custom.”

Mark Ballard is editor of The Advocate’s Capitol news bureau. His email mballard@theadvocate.com.