Funding questions surround Jindal’s budget

Earlier this year, Gov. Bobby Jindal gathered higher education officials at LSU’s campus and unveiled a plan to boost funding for public colleges and universities.

Funding higher education during an economic recession has been a thorny issue for Jindal. He has shifted much of the burden to students, easing the financial strain on state government.

What Jindal presented this year was the Workforce and Innovation for a Stronger Economy fund — or the WISE plan, for short. Colleges and universities would vie for dollars from a $40 million pool by matching their programs with actual workforce needs. Jindal could claim victories on two policy fronts: higher education and economic development.

Four weeks and a few days into the legislative session, a bill to establish the WISE fund as an account is zooming through the Legislature. Where things appear sticky is on finding that promised $40 million. Legislators also are uncertain how they’re going to make good on the governor’s promise of pay raises for 40,000 state workers.

The problem is the governor’s proposed $25 billion state operating budget for the fiscal year that starts in July. Legislators found several surprises when they started unraveling the mammoth spending plan.

State Rep. Brett Geymann, R-Lake Charles, said the governor’s budget is littered with accounting tricks to make the numbers work. He said legislators are not going to back taking $50 million from New Orleans’ Morial Convention Center or shuffling around coastal funding.

“We’re going to make some significant changes,” Geymann predicted.

More possible problems keep popping up the deeper legislators get into the governor’s spending plan.

A trust fund for the elderly that helps with nursing home expenses is hovering on empty. The state’s number crunchers made a $40 million mistake in tax amnesty program calculations. A $50 million shortfall opened up in the public schools’ budget. Leftover hurricane dollars are supposed to help pay for prison workers’ retirement costs.

“All of a sudden what you thought was relatively stable, Pandora’s box has opened,” state Sen. Gerald Long, R-Winnfield, said as higher education workers milled around him in Memorial Hall for “College Day” at the State Capitol. One college plugged in a popcorn machine and busily popped corn, making the huge hallway separating the House and the Senate chambers smell like a movie theater.

House Bill 1, the governor’s spending plan, still is in the first stage of the legislative process. The House Appropriations Committee is expected to allow the public to weigh in Monday and Tuesday in preparation for advancing the bill to the House floor.

However, Republicans and Democrats alike said they see cracks that need to be filled.

The House Appropriations Committee has made a notable tweak to the WISE fund legislation. Instead of having the state treasurer deposit $40 million into the fund each year, the appropriation now would be directed by legislators.

The governor’s chief budget adviser, Commissioner of Administration Kristy Nichols, refused to speculate on how likely it is that the WISE plan will get its initial $40 million.

“That’s a legislative question. We go through this process every year. Obviously, the Legislature has the authority to make that determination,” she said.

Legislators are especially concerned about a line in a report by the Legislative Fiscal Office. The office — staffed by financial experts — looked at the governor’s budget and concluded that “$982.5 (million) may require another source of revenue in FY 16.” In other words, nearly $1 billion in fiscal obligations could need a new funding source in a year’s time.

“It looks like all we’re doing is kicking the can down the road, and now it looks like the can might be getting bigger,” said state Rep. Eddie Lambert, R-Prairieville.

Lambert said the WISE plan is a great idea but also represents a spending enhancement. The governor also wants to fund $60 million in pay raises. “Not when you have a $900 million deficit,” Lambert said.

State Rep. Ted James, D-Baton Rouge, said the Jindal administration seems to be banking on more money materializing when economists review the state’s revenue prospects later this month or in May. He said that makes him very worried.

Like Lambert, James thinks the WISE plan is a great idea. “Can we afford it now? I don’t think so,” said James, who sits on the House Appropriations Committee.

James said he is not as confident about providing pay raises to state workers as he was at the start of the legislative session. He joked that he’s starting to think like a fiscal hawk, referring to the nickname for a group of House Republicans who want a fiscally conservative approach to the budget.

“Now I sound like my colleagues. I have one wing,” he said, indicating that he’s not a full-fledged fiscal hawk.

Another committee member, state Rep. Henry Burns, said legislators always can create the WISE plan in state law. The trick, he said, will be whether to fund it.

Burns, R-Haughton, said he hopes for an uptick in the economy.

“The WISE fund and the pay raises are recurring expenses. What good is it to give a pay raise and then have to have a 10 percent reduction and send people home?” Burns said.

Southern System President Ronald Mason said legislators would throw the entire concept behind the WISE plan off by failing to invest in the base funding.

“I don’t have a clear sense of what’s going to happen. A lot of things have to fall into place. It was designed to be a recurring source of funding … I honestly don’t know what’s going to happen in the end,” Mason said.

Louisiana Community and Technical College System President Monty Sullivan noted that the WISE plan legislation zipped through the House.

“There’s not much use in me predicting whether there’s going to be enough revenue in the state’s budget. What I can say, is that with 100 votes in the House and zero votes against it, there’s tremendous support for it, and it’s clear why: There’s a tremendous amount of workforce demand,” he said.

LSU System President F. King Alexander said he’s received no indication from the governor or legislative leaders that problems will arise in funding the WISE plan.

“I haven’t heard (WISE won’t get funded). I’ve heard concerns about the budget. Some people say ‘what if, what if, what if.’ If it doesn’t get funded, we can’t do it, plain and simple. I don’t think we can afford not to do it if we are going to meet these emerging workforce demands,” he said.

University of Louisiana System President Sandra Woodley said the concept behind the WISE plan is solid. However, she recognizes the financial challenges.

“We’re expecting WISE to get funded. I’m an optimist, but also a realist. We’re going forward regardless. It doesn’t pay to be a whiner,” Woodley said.