News and Events



Dedicated money has state budget tied in knots

 

BY THE TIMES-PICAYUNE EDITORIAL BOARD

This is how knotted up Louisiana's budget is: Roughly $24.5 billion of the total $29.7 billion budget proposed by Gov. John Bel Edwards is tied to specific programs and expenses, according to an analysis by The Associated Press.

Either it is federal money that can only be used as Congress or the executive branch allows. Or it is dedicated by state statute or the Louisiana Constitution to certain services.

Even the $9.5 billion general fund, which is the most flexible pot of money in the budget process, has strings attached. Lawmakers are required to spend about $4.3 billion on K-12 education, elections, debt payments and other mandated costs, the AP said. That leaves a little more than $5 billion for legislators to divide up.

The lack of flexibility is a main reason that health care and higher education have been hit with cuts time after time over the past decade as legislators and the governor's office made cuts to balance the budget.

Gov. Edwards called lawmakers into special session in February to close a $304 million midyear budget deficit. With the regular session set to start in April, the state is short about $440 million to provide services at the level Gov. Edwards thinks are needed for the budget year that starts July 1.

So in his proposed budget, neither the TOPS scholarship program nor hospitals that serve the poor are fully funded.

There may be less painful places to cut than those, but those are off limits. They don't have to stay that way, though.

The Legislature could remove the some of the statutory dedications on revenues and could ask voters to change constitutional dedications.

The Louisiana Association of Business & Industry argues that would be an important step toward budget reform. Unlocking dedicated funds created over the years would allow lawmakers to better prioritize existing dollars and give the public more oversight of spending, LABI officials said.

In 2015, LABI looked in-depth at how the state spends its money. The report broke down the portion of the budget that is locked up by statutory and constitutional protections. Some of the protected categories haven't been reviewed in years and may not be a smart use of money based on the state's current needs.

Then-Gov. Buddy Roemer and the Legislature abolished more than 100 statutory dedications to get more spending flexibility to deal with the oil bust in the 1980s, the LABI report said. Those changes didn't last. "Since then, dedications have been created year after year, slowly locking away billions of dollars in state tax revenue for specific functions of state and local government," the report said. The number of dedicated funds has exploded since the 1988 budget year -- increasing from 78 to 393, LABI said.


Dedicated revenue has skyrocketed for some agencies, the LABI study found. The Department of Culture, Recreation and Tourism had only $40,000 of dedicated revenue in the 2005 budget year. That had grown to $10 million by 2015. The statutory dedications for the attorney general's office grew by 239 percent in that period -- from $6.6 million in fiscal year 2005 to $22 million in 2015. The Department of Wildlife and Fisheries nearly doubled its dedicated revenue over that decade, from $62 million to $118 million.

The overall result is that some agencies are protected from cuts while others, like higher education and health care, get tapped repeatedly.

That isn't a smart way to make the most out of the resources we have.

Agreeing on what dedications to remove might not be easy. The agencies or groups whose budget allocations are essentially protected won't want to give that up. And some dedicated revenue is going where it should.

But having more flexibility to move money around to meet the state's top priorities makes sense. Lawmakers should take a hard look at which dedications make sense and which don't.

 

To read original article, click HERE

Tags:
Comments
Post has no comments.
Post a Comment




Captcha Image