La. budget short by $88 million

The Jindal administration told legislators Friday that $88 million needed to fund the current year’s more than $25 billion state operating budget is not yet in hand.

The biggest missing piece is $56 million that would be transferred from the state’s self-insurance fund. The transfer hinges on legal negotiations involving insurance claims ending successfully for state government.

“Twelve months ago when I was in this position dealing with the budget, we were in negotiations for that $56 million. I’m dealing with another year’s budget now and we’re still in negotiations,” state Rep. Jim Fannin complained during a meeting of the Joint Legislative Committee on the Budget.

Fannin, D-Jonesboro, sponsors state operating budget legislation every year. Currently, he is overseeing public hearings on the proposed budget for the fiscal year that starts July 1.

Barry Dussé, state director of planning and budget for the Jindal administration, said the money should materialize.

Dussé disagreed with one legislator’s characterization of the administration pulling numbers out of the air and plugging them into a state budget that funds hospitals, colleges and other public services.

“It’s not out of the air. It has to be a reasonable belief that these revenues can come into play,” Dussé said.

The administration still is waiting to receive:

• $10 million in federal funds.
• $56 million from the self-insurance fund.
• $11 million from the Louisiana Housing Finance Agency.
• $10 million from the lease and possible sale of a New Orleans hospital.
• $1.1 million in tourism promotion dollars.

State Rep. Lance Harris, R-Alexandria, asked what will happen if the money fails to materialize.

State Sen. Jack Donahue, R-Mandeville, interjected that the Legislature will have to take action.

“So if we can’t find it, there’s cuts?” Harris asked, directing his question to Dussé.

Again, Donahue answered for the administration. “Yes,” he said.

Many of legislators’ questions centered on the $56 million involving the state’s self-insurance fund.

Charley Rome, fiscal analyst for the Legislative Fiscal Office, said he cannot get an accounting from the Office of Risk Management on how the transfer can be made without risking the state’s ability to pay repairs on state buildings.

The Office of Risk Management, which is part of the Division of Administration, runs the state’s self-insurance program and oversees coverage for state property.

Rome said he asked for the accounting at the end of January.

“The request was ignored,” Rome told legislators.

Fannin made a successful motion ordering the office to produce the information by next week.

State Sen. Ed Murray, D-New Orleans, pressed for information on what is being settled to produce $56 million.

He asked if one case or several cases are involved.

Dussé said it was one case. Rome said he thought it actually was three cases.

Murray then asked if final judgments are in hand.

Dussé told him negotiations are ongoing.

“I’m a lawyer. I sue people, too. I wish I could count the money like you all do,” Murray said.

By the time state Rep. Chris Broadwater, R-Hammond, got his turn at the microphone to ask questions about the settlement, help had arrived for Dussé via his smartphone.

“Technology is catching up with me,” Dussé said.

Reading from his phone, he said the case involves three insurers and litigation involving excess coverage.

Comments

1) Comment by for real - 23/03/2013

Jindal has always had problems with spending funds that are not there. Judge deals another blow to La. in its unpaid Medicaid bill fight Read more from Business Report here: http://businessreport.com/daily-report/AM/3072013/Judge_deals_another_blow_to_Louisiana_in_its_unpaid_Medicaid_bill_fight#ixzz2OPTYgggF Some of Medicaid over-payments by the Feds occurred on Bobby Jindal’s watch as Secretary of the La. Department of Health and Hospitals. Bobby is credited with fixing the fiscal problems that existed when he took over DHH. Part of the fix appears to have been spending Federal funds that did not belong to the state. Read more here http://forgotston.com/2013/03/08/another-of-jindals-chickens-roosts/

2) Comment by RODEO CLOWN - 23/03/2013

Beabea : I do appreciate your effort. Thank you for researching and providing an answer to my question. Your concern about “revenue shortfalls” with respect to Jindal's proposal is realistic and more than warranted. First: Jindal has never tied his “revenue neutral” approach to revenues from a specific fiscal year. Why is such important? Like my two year old granddaughter says, “because” the state has ran “short” of funds every year Jindal has been in office. The “revenue neutral” approach is simply replacing revenue from one source (corporations and businesses) with revenue from another source (the citizens of Louisiana) the objective of which is simply to maintain revenue levels-not increasing them. As indicated, maintaining revenue levels is not what is needed. Louisiana needs to increase revenue not maintain or equal the previous year(s) levels that have proven inadequate. It is remarkable that in Jindal's first four years of office, total state revenue averaged a decrease of almost a billion dollars($925 million) per year of collections.(LA. DEPT OF REVENUE REPORT, 2011, pg-16) In this respect, Jindal has failed miserably as governor and administrator. Any given year chosen for a “revenue neutral” bases will fail to produce the revenue necessary for state operations. Revenue shortfalls under Jindal's “revenue neutral” approach is virtually guaranteed. The fact that Louisiana will not have the revenue necessary to operate is not a concern of Jindal's. The goal of Jindal's “revenue neutral” approach is to insure that in Louisiana “only the little people pay taxes”(Leona Helmsley).

3) Comment by RODEO CLOWN - 23/03/2013

I found the definition of “revenue neutral”. Remarkable, I “giggled” it and up popped the definition. Ya'll will find it quiet interesting. In particular the second sentence of the definition. revenue neutral: Taxing procedure that allows the government to still receive the same amount of money despite changes in tax laws. The government may lower taxes for one particular group of people, but raise taxes for another group. This allows the revenue that they receive to remain unchanged (neutral). Read more: http://www.investorwords.com/8338/revenue_neutral.html#ixzz2OP7iT Basically, the phrase "revenue neutral" appears to be code for "only the little people pay taxes"(Leona Helmsley)

4) Comment by Ben Yay - 23/03/2013

So here we go again. I thought this governor of ours is supposed to be so smart. Does he know how to count? And this is the guy who wants to make a major overhaul to the tax system?

5) Comment by beabea - 23/03/2013

According to www.investorwords.com definition of revenue neutral: "Taxing procedure that allows the government to still receive the same amount of money despite changes in tax laws. The government may lower taxes for one particular group of people, but raise taxes for another group. This allows the revenue that they receive to remain unchanged (neutral)." The Jindal administration appears to claim this tax swap will not change the net amount of tax revenue collected. So my concern is, what if they're wrong and the amount of revenue collected does decrease? And even if they were right and this did in fact turn out to be revenue neutral, that would seem to suggest we'll continue to suffer these mid-year shortfalls.

6) Comment by RODEO CLOWN - 23/03/2013

Does anyone really know what the phrase “revenue neutral” really mean? It would be nice if an accurate definition of the phrase could be provided so basic evaluation of any/all tax proposals could be conducted on an “apples to apples” bases. Where's Jeff Sadow when you need him?

7) Comment by beabea - 23/03/2013

Keep this in mind next time you hear them promise how their proposed tax swap is going to be "revenue neutral." When, in the last five years, has "revenue neutral" ever been enough revenue? Which is not to suggest that I believe for a minute the tax swap would actually BE revenue neutral, as opposed to just another Jindal gimmick where expected revenue fails to materialize.

8) Comment by GardenVariety - 23/03/2013

No offense intended to your username, Crawdaddy, but how is Darth Jindal going to crawfish out of this one? I'm sure he will, but it'll be interesting to see how. I also can't wait to hear his convoluted, cliche-filled, meaningless explanations of the situation; or even better, one of Nichols' patronizing, threatening, and impudent ones. The torture never stops, does it?

9) Comment by Crawdaddy - 22/03/2013

Here we go again staring at another end-of-year budget cut because legislators allow Jindal to base his budgets on contingencies. Jindal wants these cuts -- it is his preferred way to "reform" government by starving "it" ("it" being higher ed, health and social services) with ever-lessening state appropriations.

10) Comment by zealer99 - 22/03/2013

"the money should materialize, the money should materialize, the money should materialize." Say it and you will believe.