Dispute stalls budget

05 11, 2012 by The Advocate

Proposal to use one-time money strongly opposed

Debate in the Louisiana House on the $25 billion proposed state spending plan sputtered and finally stalled Thursday after hours of negotiations on how the budget should be balanced.

With no resolution in hand, legislators will return to the State Capitol on Friday to try to reach an agreement on a largely philosophical difference over the amount of one-time money used in the state operating budget for the state fiscal year that starts July 1.

At issue is whether to make deeper cuts or to rely on $268 million that is only likely to materialize once.

The Jindal administration contends the one-time money is necessary to prevent huge cuts to colleges and health-care services. Critics, who consider themselves to be conservatives, counter that state government needs to operate on the revenue it generates instead of on the proceeds from selling a building and other one-time money sources.

State Rep. Jim Fannin, D-Jonesboro and the budget bill’s sponsor, kicked off debate with a question-and-answer session. He never reached the point of asking legislators to crack open the thick bill that outlines how every agency in state government is funded. Instead, debate hovered over the use of one-time money.

Recesses were called, with one lasting for hours, to give the opposing sides an opportunity to talk. One faction trooped out to the State Capitol steps to hold a hastily called news conference on the issue. Large pools of legislators formed on the House floor to discuss strategies. Some legislators took the elevator to the Governor’s Office to sit down with the Jindal administration.

All that emerged was a stalemate.

The dispute drew the attention of U.S. Sen. David Vitter, R-La., who inserted himself into the debate on whether nonrecurring dollars should be used to fund health care and other state expenses that must be paid year after year.

“I really congratulate House conservatives for standing tall against the use of one-time money to balance the state budget,” Vitter said in a prepared statement about the stalemate.

During a lunchtime recess, House leaders seemed optimistic about the chances of bringing House Bill 1, the budget legislation, up for debate after the failure of a procedural vote on the legislation.

“We have options,” House Speaker Chuck Kleckley, R-Lake Charles, said at one point. “We’re just trying to figure out what those options are.”

With Gov. Bobby Jindal busy with an economic development announcement in Garyville and a fundraiser in Alabama, negotiation duties fell to Commissioner of Administration Paul Rainwater and Kleckley.

Republicans, including the vice chairman of the House Appropriations Committee, presented the Jindal administration with a slate of proposed cuts as an alternative to balancing the budget with one-time money.

The suggestions included sending state workers home for 12 days without pay and making budget cuts across state government.

Rainwater responded with a letter that stated $268 million in reductions would result in deep cuts to higher education, health care, public hospitals and prisons.

“We presented a budget that protected higher education and healthcare,” he wrote. “As you consider amendments to this budget, the reality is that any additional cuts will be made to higher education and healthcare services.”

Rainwater’s letter coincided with statements by state health-care and higher education officials predicting dire results from the loss of one-time money.

“Eliminating one-time funds from the budget for next fiscal year will result in catastrophic cuts to our universities,” University of Louisiana System President Randy Moffett said.

Republicans stood their ground, insisting that cuts could be made without crippling vital services.

“We believe it’s time to stop using one-time money, and we’re going to take a strong stand,” state Rep. Brett Geymann said.

Geymann, R-Lake Charles, later circulated a 2008 news release issued by Jindal’s staff.

The release summarizes a news conference in which the governor compared using one-time money for recurring expenses to using a credit card to pay the mortgage. Jindal characterized the practice as fiscal irresponsibility.

At the time, the state was flush with money. The national recession, coupled with the amount of tax breaks the state grants each year, changed those fortunes.

Rainwater said after the House adjourned Thursday night that the Jindal administration has reduced state government’s reliance on one-time money.

He avoided commenting on whether the Jindal administration would be in favor of repealing a House rule that makes it harder to use one-time money in the state budget.

On his way home after a long day, Fannin said a lot of work remains to be done on the budget.

He said he is leaving the negotiations to Kleckley and the Jindal administration.

“I’m not working the deals. I’m here for help,” Fannin said.