Here is part two of a Google Hangout discussion from Saturday in which Tyler Bridges of The Lens and former government official Jim Brown talk about the Legislature. Part I
Brown: ...have to call a special session.
Bridges: Two of the most articulate or best analysts of the budget; one is State Rep. Brett Geymann and the other is C.B. Forgotston, who used to be the chief counsel for the budget committee in the House. They are both looking at the numbers, and they believe that there's a structural deficit, and that next year...They may pass a budget this year that they say is balanced, but they're doing it in such a way that next year, the state will be facing an imbalance of at least a billion dollars. As Jim pointed out with the cuts to higher education, it used to be that the state paid for about two thirds of the cost for a student to attend one of the state's higher universities or colleges. Now, that's down to about one third, what the state pays for now. In certain ways, it could be called a tax where private individuals, students' families, are not having to pick up that difference because of budget cuts.
Sabludowsky: Sure. Is Louisiana going to have a...how much money are we going to have to cut this budget year? Are we looking at...you say there's not enough tax revenue. So, what are we going to cut?
Bridges: They will find a way to pass this year's, I mean, the budget for next year. I should make an additional point, which is, Louisiana, as Jim knows, runs on a fiscal year schedule that begins July 1. The state is on a schedule that is not the calendar year, but beginning July 1. So the year ends June 30. The state also doesn't have enough money and that can be worked out. The deficit would just be pushed over to the next year. But the state is facing big budget problems, and there are many people I talked to in the legislature - and Jim may be hearing this as well - who believe that Governor Jindal is just trying to make sure he gets through until his term ends in 2016 without having to deal with a major problem so he can focus on his national ambitions.
Sabludowsky: Sure. Also, I hear that a lot of the funds have been depleted in terms of the slush funds. Am I correct about that?
Brown: When you say slush funds, you mean as far earmarked or specific non-profit programs? That's been cut back dramatically, and it should be. There's just not the money there for that. That whole..all those earmarks came under great scrutiny. I give credit where credit is due. John Kennedy, the State Treasurer, went ahead and specifically laid out those earmarks and showed that there--was no accountability; that the requirements under the law that financial documents be filed had not been met. So thanks to the Treasurer, there's been a great cutback. On the other hand, all those earmarks combined might have been 60-70 million dollars in the scheme of a budget that is 26-27 billion. It's just not a lot of money, Steve; it's not going to make that much of a difference. Kennedy, by the way, also says we should come across and cut all these contracts to individuals and companies by 10%. That 10% would generate a significant amount of money. So all those ideas are going to be on the table if the worst happens; if the federal government turns us down. Jindal will just be lying?--why are they picking on Louisiana? Well, Governor, let me tell you something if you're watching this Hangout. You can't sit there and pound the federal government day after day after day and then expect them to give you any special considerations. We got this whole healthcare issue that's very complicated where Jindal is trying to get certain credit for a funds or contracts the state entered into to generate about a billion dollars. The feds have said no right now. I don't think they're going to back off of that. But you know, when you remember the golden rule - who's got the gold makes the rules - and we just haven't deference. The hell with the federal government; we hear that all the time. But that's where a massive amount of money comes into the state of Louisiana. So Jindal is trying to play it both ways, and he just can't do it, quite frankly, Steve.
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Bridges: If I can jump in. Jim, you make a great point. Something called the tax foundation, which is an independent organization, not in Louisiana, came out with a study that showed that as to the a percentage of the overall budget, Louisiana is no. 2 in the percentage of its overall state budget that comes from the federal government. Only Mississippi gets a higher percentage of its overall budget from the federal government.
Sabludowsky: So we're actually addicted to federal money, but we're telling the feds, "Don't spend any money," is that correct? Or, "Don't spend as much money."
Brown: It's just hard to keep biting the hand that feeds you because as we know, there are politics in all these decisions. There's some discretion. You know, bureaucrats in Washington who hand out these billions of dollars have feelings just like we all do. If they see, "This state of Louisiana just keeps pounding us and pounding us and pounding us, and now they want us to bend over backwards and help them with their applications." So we're trying to have it both ways, and obviously, it just doesn't work out.