Jindal administration scolded on surplus

Chairman says administration not honoring deal

In her first appearance at a legislative budget meeting as the governor’s top financial adviser, new Commissioner of Administration Kristy Nichols endured a tongue lashing aimed at her boss, Gov. Bobby Jindal.

Louisiana House Appropriations Committee Chairman Jim Fannin, D-Jonesboro, scolded the Jindal administration for making a pitch to change the direction of dollars from an expected $143 million surplus.

Fannin said the governor wants to ignore the law and renege on an agreement that convinced legislators to vote in favor of the Jindal administration’s version of this year’s $25 billion state operating budget.

Nichols countered that legislators ultimately will decide whether to go along with the governor’s alternative plan for the money.

“We will come back to you for a decision,” she said.

The governor signed legislation into law earlier this year directing surplus dollars from the fiscal year that ended June 30 into the state’s “rainy day” fund. The fund serves as a savings account to sock away money for difficult financial times.

Months later, after a health care funding crisis emerged, the Jindal administration argued the rainy day fund language no longer was valid and that $94 million of the surplus can be used to pay Medicaid bills.

Medicaid is the government health insurance program for the poor.

“We have problems with revenue right now and we have needs,” Fannin said. “I understand that. But the first requirement is to follow the law.”

Fannin said he wanted Jindal to publicly know his position.

As appropriations committee chairman, Fannin helps shepherd the governor’s proposed budget through the legislative process. Earlier this year, he fought to keep the governor’s proposal intact against a faction of House legislators who wanted to make deeper cuts.

In the weeks leading up to the meeting, Fannin made his position on the surplus clear, saying it needed to go into the rainy day fund. Friday was the first time he strongly rebuked the governor for advocating that the money be spent on health care.

The issue arose naturally during the meeting with a discussion of how much money likely will be left over once the books are closed on the 2011-12 fiscal year.

Nichols introduced herself to the committee ahead of the briefing on the surplus. As a long-time aide to the governor, she is familiar to legislators but now holds a more high-profile role.

“It’s a pleasure to be here and an honor to serve you and the governor,” Nichols said.

For the surplus, the Jindal administration estimated an unobligated figure of $143 million.

Fannin punched the button indicating he wished to speak and then disputed the use of the word “surplus.”

His contention is that the money is obligated to the rainy day fund, also called the Budget Stablization Fund, and describing it as a surplus suggests it is available to be spent.

Before quitting his job as commissioner of administration this month to become the governor’s chief of staff, Paul Rainwater said Fannin did not insert the rainy day fund language into the bill, making him the wrong person to interpret whether, as the administration contends, legislators only meant for dollars recognized before the fiscal year ended to go into the rainy day fund.

At Friday’s meeting, Fannin denounced suggestions that he misunderstood the intent of the language.

Fannin said he stood at the microphone on the House floor and promised legislators that any unspent money would go into the rainy day fund. He said that promise ended a dispute that stalled the budget process.

After Fannin finished speaking at a meeting of the Joint Legislative Committee on the Budget, the panel moved to another topic.

On the job mere days as the governor’s third commissioner of administration, Nichols sat in silence facing the committee while Fannin scolded the administration. She kept her seat during a subsequent discussion of a borrowing problem involving the Mercedes-Benz Superdome.

Once the Superdome conversation wrapped, she asked to make a few comments.

Nichols said legislators will decide during next year’s session how the surplus is spent.

She said the administration aggressively cut the budget after Congress unexpectedly reduced the amount of money the federal government would contribute toward the Medicaid program.

Since states and the federal government share the cost of providing health care to the poor and uninsured, a decrease in federal funding forces states to make cuts or come up with more dollars.