BY MICHELLE MILLHOLLON
Capitol news bureau
June 24, 2012
Strapped for cash, the Jindal administration plans to use leftover hurricane recovery dollars to fund nearly half the cost of a program that provides pre-kindergarten and child care to thousands of at-risk 4-year-olds.
The shift of $33 million in recovery dollars is not the first time the state’s turned to creative solutions for funding the $76 million LA 4 program.
In the current budget year that ends June 30, the Jindal administration used $41 million in federal stimulus funding to give 4-year-olds from low-income homes the social and academic skills needed for kindergarten.
Stimulus dollars evaporated, forcing the state to look elsewhere for funding.
The Jindal administration decided to grab unspent recovery dollars, known as Community Development Block Grants, originally intended to help the state rebuild from hurricanes Katrina, Rita, Gustav and Ike. In state government lingo, Community Development Block Grants are known as CDBG.
The use of the money generated little discussion during the legislative session. Jindal administration officials said they still are uncertain whether approval will be needed from the federal government to spend the dollars on education instead of storm recovery.
Budget leaders in the state Senate and Louisiana House expressed surprise that LA 4 relies on recovery dollars in the $25.6 billion state operating budget that kicks in July 1.
State Rep. Jim Fannin, D-Jonesboro and the state budget bill’s sponsor, said state government cannot continue to cobble together a spending plan with patchwork funding.
He said the state needs to raise new revenue, make real cuts or reduce tax breaks that erode revenue.
“You’ve got to find another revenue source for it ... We’ve got some decisions to make,” Fannin said.
State Sen. Jack Donahue, R-Mandeville and chairman of the Senate Finance Committee, said adequate state dollars need to be available every year to fund necessary programs such as LA 4.
Donahue is leading a study to look at the amount of money the state grants each year in tax credits, exemptions, rebates and deductions.
The tax breaks whittle the state’s revenue base.
Commissioner of Administration Paul Rainwater, the governor’s chief budget adviser, said by e-mail Friday that LA 4 is a priority.
“As we always do during the budget development process, we will continue streamlining government to find savings throughout the budget so that it has the resources it needs,” Rainwater said.
State Rep. Brett Geymann, R-Lake Charles and a member of the House Appropriations Committee, said he is surprised the flexibility exists to direct the recovery dollars to LA 4. He said he is concerned that the program is relying on temporary dollars.
“To my knowledge this is the first time CDBG money has been used in LA 4,” he said. “I hope this is not problematic in the future.”
Christina Stephens, spokeswoman for the Division of Administration, which develops the state budget each year, said the rationale for using the money for LA 4 is that some of the children served live in areas affected by the hurricanes.
“Most aspects of providing a public service, like running the LA 4 program, are potentially eligible to be paid for using CDBG funds,” Stephens said.
As for whether federal approval is needed to redirect the dollars, Stephens said the administration still is working out those details.
LA 4, originally known as the Cecil J. Picard LA 4 Early Childhood Program, began 10 years ago as a way to increase the educational preparation of the state’s 4-year-olds. Roughly 16,000 children are enrolled in the program.
Across state government, revenue is falling short of the money needed to keep services at their current level. The shortfall prompted a patchwork approach to the budget with dollars drawn from various areas, including property sales, to fill in the revenue gaps.
CDBG dollars also came in handy when putting together the budget for the Louisiana Stadium and Exposition District, which oversees the Superdome in New Orleans. Money from hurricanes Katrina and Rita will continue to support the LSED’s budget in the fiscal year that starts July 1, as recovery dollars have for the past several years.
The district will use $11 million that was originally allocated to fisheries, rental housing and local government infrastructure affected by the 2005 storms.