La. lawmakers face surplus

BATON ROUGE (AP) — After years of divvying up cuts, state lawmakers have a pleasant financial problem: deciding how to spend as much as $300 million in unallocated cash from Louisiana’s treasury.
The dollars include a surplus from the last fiscal year and excess collections from a recent tax amnesty period that generated more than expected.
With the cash surprise comes disputes about how to allocate the money in a state that has struggled through years of budget slashing, that faces a looming shortfall next year and that has a list of needs that far surpass available income.
“Everybody has an idea,” said Sen. Jack Donahue, chairman of the Senate Finance Committee. “At least it’s nice to have money to talk about.”
Some people are eyeing the money for long-stalled highway projects. Treasurer John Kennedy wants the surplus from last year poured into construction work on Interstate 49-South, a project that has been on the drawing board for years.
Donahue, R-Mandeville, thinks the state’s “rainy day” fund should be replenished with some of the cash, since the state owes the fund $330 million by 2015 as part of a lawsuit settlement.
Lawmakers eyeing a multibillion-dollar retirement debt think money should be directed toward the problem. Others want to help Louisiana’s public colleges after six years of cuts to their state financing.
Some legislators want to use the money to help craft the 2014-15 budget for next year, when the state is short an estimated $547 million in the dollars needed to continue all current services and account for inflationary increases.
Meanwhile, some gaps have appeared in this year’s budget and likely will need to be filled.
Final plans won’t be decided until lawmakers return for their next regular session, which runs from March 10 through June 2.
Gov. Bobby Jindal said he wants the excess cash steered to education and health care, without spelling out details. His recommendations should become clearer early in the new year when he unveils his budget proposal before the legislative session.
“We’ll obviously want to consult with legislative leaders and work with the Legislature. I’d like to see those dollars ultimately invested in education and health care. I think those are two critical areas for the state,” the Republican governor said.
Tangled up in the spending discussions, however, is consideration of what restrictions exist on the money — and what loopholes could be used to get around those limits.
The first pool of money is as much as $163 million left over from the 2012-13 fiscal year that ended June 30. Auditors still have to review the state’s books before the surplus amount is certified.
The state’s constitution limits the way surplus money can be spent. It can be poured into the “rainy day” fund or used for other one-time items, such as bond payments, retirement debt, construction projects, college building improvements and coastal restoration work.
In the last legislative session, Jindal and lawmakers funneled surplus dollars through the budget to fill a gap in the state’s Medicaid program. They never got the money certified as a surplus by the state’s income forecasting panel, called the Revenue Estimating Conference, so the constitutional restrictions never kicked in.
On the extra money generated from the tax amnesty program, lawmakers could have anywhere from $90 million to more than $150 million to spend, depending on the final accounting of the back-owed tax collections.
The Revenue Estimating Conference will be left to decide how much of that money is deemed “non-recurring” and limited to the same list of spending items as surplus funding.
But Jindal and lawmakers worked around those kinds of restrictions during the tax amnesty period approved in 2009, using budget maneuvers that ultimately got the money into the state’s operating budget despite the limitations.
“I don’t think there’s an appetite in the House for us to do that again,” said Rep. Joel Robideaux, R-Lafayette, a House leader and sponsor of the tax amnesty bill.
A group of fiscal conservatives in the House says dollars that won’t reappear year after year should be spent on one-time expenses.

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