Inside Report: Kennedy at odds with Jindal -- again

State Treasurer John Kennedy said he considers Gov. Bobby Jindal a friend, even though they have not spoken in 18 months.

Mostly, they communicate by missive, primarily on the best way to balance a state budget beset with revenue problems.

Kennedy presented a 16-point plan in 2010 that he contended could protect higher education and health care from deep budget cuts by saving the state $2.6 billion. The Jindal administration responded by launching a webpage debunking many of the points in Kennedy’s plan.

Two years later, Kennedy accused the governor of using scare tactics to fight the Louisiana House’s changes to the $25 billion state spending plan. The governor’s then-commissioner of administration, Paul Rainwater, responded by charging that Kennedy peddled half-baked ideas that discredited Jindal.

Kennedy once again applied pen to paper this month, this time to call the governor’s $24.7 billion proposed spending plan “a fond illusion.”

Facing a $1.3 billion shortfall in the money needed to keep state government services at their current level, the governor wants to sell property, refinance a tobacco settlement and take $100 million from the New Orleans Convention Center to keep the state afloat in the fiscal year that starts July 1.

One-time, or nonrecurring, dollars would help fund the state’s public colleges and universities. Those dollars would be bolstered by tuition increases.

“Call this budget what you like: a fond illusion or smart accounting. The result will be the same: midyear budget cuts for the sixth year in a row,” Kennedy predicted.

Midyear budget cuts have dogged Jindal, practically since he took office in 2008.

The latest round of middle of the year cuts hit last year.

Two weeks before Christmas, Jindal cut funding for hospice care, dental benefits for pregnant women and battered women’s shelters, partly because of a slump in state funding. Hospice later got a reprieve, but the other cuts stayed in place.

Kennedy said Jindal should cut expenses such as consulting contracts and build in safeguards by budgeting only a portion of the projected state revenue each year.

The alternative, he said, is yet another midyear cut.

“If you believe this budget is balanced, then you probably also believe in the tooth fairy, the Easter bunny and that Jimmy Hoffa died of natural causes,” Kennedy said.

Commissioner of Administration Kristy Nichols, the governor’s top budget aide, said she appreciates Kennedy’s right to an opinion, but will pass on his suggestions.

Nichols said the Jindal administration already is reducing consulting contracts in the upcoming fiscal year. She said professional services are slated to drop by $153 million, or 25 percent, in the governor’s spending plan.

She said Kennedy wants people to believe that private businesses routinely slash contracts by 10 percent because they are short on money.

“The worst thing you can do is say, ‘Let’s take an arbitrary approach,’ ” Nichols said.

She said midyear budget cuts are the result of revenue forecasts, not budgets passed by the Louisiana Legislature.

Nichols said the Jindal administration is embracing good government.

Kennedy said he just wants the governor to present a truly balanced budget instead of make-believe.

“I don’t know why he’s doing it this way. I’m not going to suggest they’re bad people for doing it this way. I consider Bobby a friend — very bright, might be president one day. I might vote for him,” Kennedy said.

Michelle Millhollon covers state budget policy for The Advocate’s Capitol news bureau. Her email address is mmillhollon@theadvocate.