PAR Questions Jindal’s Budget



Wednesday, Public Affairs Research Council (“PAR”) released a review of the revenue side of Bobby Jindal’s proposed Operating Budget for FY15 (begins July 1). (See report here.)

Some highlights of the findings by PAR

–PAR questions some of the proposed budget increases.

These increases are aimed at programs that generated negative headlines for the administration last year when the governor’s treatment of them was less-generous, though in some cases prudent. These are in addition to planned increases in government’s continuing personnel costs such as state employee pay, healthcare premiums and retirement contributions.

My take: Jindal is trying to rehabilitate his dismal image in Louisiana to enhance the prospects for his presidential campaign.

–PAR says overall state revenues are projected to drop in FY15.

My take: How can revenues can be dropping with Jindal and his ethically-challenged head of economic development, Stephen Moret, continue to tell us that our economy is booming?

— In light of the revenue dropping, PAR questioned how Jindal is paying for the new spending in his FY15 budget.

The $210 million for defeasance [of State General Obligation bonds] and the $51 million for the Coastal Fund are essentially potential methods of turning non-recurring dollars into spending for recurring costs.

My take:  Jindal is paying off some existing state debt early in order to free up recurring cash for one year. At the same time, the state is incurring more debt for which the first payment will be due in FY16.

Where the can stops...
Where the can stops…

[The defeasance] next year will have an effect on budget sustainability in the subsequent year. The plan for defeasance essentially inflates the FY 2015 general fund with money that will not be available to the FY 2016 general fund.

My take: Jindal kicks the can down the road – AGAIN!

— Coastal Fund money-laundering machine.

The $51 million that will be put in the Coastal Fund could later be moved out through the “funds bill.”

Under past practice, one-time money that moves through the funds bill can end up paying for the ongoing operating expenses of the state.

My take: Jindal relies on more one-time revenues to pay for recurring expenses. Stopping such practices is the primary goal of the “Fiscal Hawks” from whom we’ve heard nothing.

— [S]tatutory dedications are projected to decrease by $458 million (-10.2%).

My take: In order to balance the budget, Jindal has been “borrowing” money from these funds which are supposed to be used to fund various functions of government. They will have to be repaid before there are cash flow problems.  If the funds are not repaid, it will mean increases in various fees.

You’ve been warned!

PAR does a good job of warning the leges that Jindal is, once again, putting them in a “trick-bag.”

After the FY15 budget is approved this summer, Jindal only the FY16 Budget with which to deal. He only has to make sure that the cash doesn’t run out before February, 2016 (6 months) at which time making ends meet will be left up to a new governor and a new lege.  Jindal has shown that he is quite adept at coming up with various budgetary gimmicks and imagined revenue sources.

Action needed

One Year Aniversary is nothing to be proud of...
Not Happy?

If you don’t want your taxes (tuition and fees) to be increased or vital services cut as soon as Jindal is no longer governor, you should contact your leges and tell them to stop kicking the can down the road.  The end of the road is in sight.

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