Despite legislative speech-making about running government like a business or a household, balancing Louisiana’s budget isn’t quite as simple as keeping the family’s checkbook on track.
Sure the state has to pay its debts, keep the lights on and spend only as much money as the treasury brings in like at a family home or in a company’s operations.
The similarities largely end there.
Louisiana state government must maneuver through a labyrinth of federal regulations, state constitutional restrictions, retirement obligations, court judgments and self-inflicted complications that limit how the state can make cuts and often dictate where it must spend.
A governor and lawmakers can’t simply pull down a list of programs and services Louisiana provides and determine, without constraints, what the state should and shouldn’t be doing.
That nuance often gets overlooked in favor of political talking points. But amid nine years of continued state financial gaps and cuts to close them, those rules and limitations have made the task of budget balancing more difficult. They’ve also made public colleges and certain health programs for the poor, elderly and disabled most vulnerable to the repeated slashing.
Understanding the restrictions — and which constraints can be changed — could be critical to achieving the stabilization of state finances and reform of budgetary tactics that lawmakers say they want in the upcoming legislative session that begins in April.
Gov. John Bel Edwards kicked off the budget negotiations with the release of his $29.7 billion spending proposal for the financial year that starts July 1.
Nearly half the money — more than $13.7 billion — is federal financing tied to specific programs with limitations on how the dollars can be spent, such as disaster recovery, food stamps, the Medicaid program or roadwork. The money can’t just be reshuffled according to a state’s wishes. It can’t be used to fill holes in the TOPS college tuition program, for example.
Of the remaining $16 billion in the spending recommendations, 40 percent is earmarked in state law or the Louisiana Constitution for specific purposes or is generated from fees for services. That includes tuition dollars paid to colleges, lottery proceeds set aside for K-12 education and car registration fees that help pay for motor vehicle offices.
The final slice — tax dollars and collections known as state general fund money — is about $9.5 billion, about one-third of the governor’s budget proposal. That’s the true flexible pot of money for setting state priorities.
But even there, constraints exist.
Commissioner of Administration Jay Dardenne, the governor’s chief financial adviser, laid out those limitations when he presented Edwards’ budget proposal to lawmakers. He said the state constitution requires the funding of things like debt payments, the K-12 public school financing formula, elections and a state supplement to local police salaries.
Those constitutional requirements, Dardenne said, total $4.3 billion for the upcoming 2017-18 budget year.
In other words, of the $9.5 billion in general tax dollars that are the most flexible, nearly half are spoken for already, before Edwards and lawmakers decide their priorities, such as how much they want to spend on education or health services.
Complicating the divvying of dollars further, lawmakers and voters have made it difficult to cut some areas, adding protections for payments to hospitals and nursing homes, for example.
That’s not to say lawmakers can’t change some rules to make it easier to rework spending.
So far, however, they’ve only nibbled around the edges in that area. They’ve repeatedly refused to scale back protections in the state’s constitution or laws that limit their ability to decide budget priorities each year.
House Republican leaders believe they started long-term reform in last month’s special session, by successfully pushing legislation seeking 3 percent cuts to fees and other dedicated revenue that agencies receive. The money, as much as $96 million next year, could be diverted elsewhere for spending.
But the legislation only calls on the treasurer to “begin establishing procedures” for reshuffling the money. It doesn’t ensure it takes place, and some lawmakers already are showing resistance to the cuts.
Source: The Times