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.