Wednesday, 18 May 2011 00:01

Rainwater Calls Louisiana House Committee's Action, Fiscally Irresponsible

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Louisiana's Commissioner of Administration, Paul Rainwater, the architect of Gov. Jindal's budget, has called action by the House Appropriations committee "fiscally irresponsible".

The comments are similar to that of the Secretary of Louisiana Economic Development, Stephen Moret, who said the actions by the committee threatens 25,000 jobs and certain economic development projects. 


Here are Rainwater's written comments:


Commissioner of Administration Paul Rainwater released the following statement today in response to changes made to the FY 2012 state budget by the House Appropriations Committee:


“A couple weeks ago, when the Speaker began criticizing our budget proposal, I was asked whether we would object to any additional cuts to the budget, and my response was that of course we would be open to working with legislators, but that we would be expecting to see from them proposals that meet two criteria: That they are specific, and that they are responsible.


“Here’s what I meant by that: Do the cuts just cut for the sake of cutting, without consideration for the impact on critical services and important state priorities?  Unfortunately, what we’ve seen today is not an example of fiscal responsibility but an exercise in fiscal irresponsibility.  The House Appropriations Committee shirked their responsibility with nebulous mandates that have no bearing on the practical consequences.


“And here’s the thing: We have made significant reductions for a balanced budget without tax hikes: over $400 million in department-by-department cuts, over $100 million by turning midyear cuts into recurring savings, and another $100 million in position reductions across state government.  We’ve made the cuts.  We are the ones who have led the way in reducing the size and cost of state government.  We’ve done it by making a careful analysis of each department’s services and transforming and consolidating agencies and programs so that they can literally do more with less.


“Again, what the House Appropriations Committee has done is cut for the sake of cutting, making unnecessary and arbitrary cuts, with no apparent curiosity as to the impact.


“If you recall, we started developing this upcoming budget before the current fiscal year even started.  As a proactive step, I asked all cabinet departments and higher education to begin planning for 35 percent reductions.  This was an important part of the process, as it focused departments to tighten their belts, to prioritize and review performance of programs, and to prepare to undertake strategic reductions while protecting critical investments.  These discussions were important to streamline government by identifying policy reforms, programmatic innovations, consolidations, eliminations and other cost-saving measures.


“What they also did was show us two things: First, here’s a level of cuts that if we dip beneath will have true negative impact into critical services.  And second, here’s the challenge we have to meet through policy changes and reforms to help us continue those critical services.


“Let’s take up a couple examples.  In the boilerplate language of their amendments, they say cuts will be to department’s ‘travel, operating services, supplies, acquisitions and other charges.’  Let’s be clear: for many departments, we’ve already trimmed departments’ travel and supplies – these cuts will come from operations and from services.  Which ones?  Well, they don’t specify.  They shirk their obligation to be specific and responsible.


“Even more egregious example: They delete funding from every department to cover the 27th pay period.  There are only two consequences that I can see from this:  First, without that funding, you are basically talking about a two-week unpaid furlough throughout state government.  Again, because the committee didn’t specify, it begs the question: do they want that staggered throughout the year with different departments at a time, or are they saying that we should essentially shut down government for two weeks at the end of the fiscal year?  Or second, maybe they mean they just don’t care, departments should just deal with it – and in other words they just gave another mandate to cut services elsewhere to make up the difference.  Either way, again, it’s unspecific and irresponsible.


“Now let’s turn to the bigger picture: When we proposed prison sales and the TOPS amendment, these were strategic decisions.  First, they are good policy in their own right.  But they are also smart in what they contribute in mitigating cuts to critical services and state priorities.  The House Appropriations committee decided to reject the funding that could come from these policies outright, and for what?  They ‘protect’ the prisons by rejecting the prison sale proceeds – and then turn around and devastate the budget of the department of corrections, with the potential of closing 5 prisons.  This is not brilliant logic.


“On TOPS, rather than work with us to pass this responsible measure to protect long-term funding for this important program – they stripped the money from it, assuming it won’t come.  In the meantime, they impose greater cuts on health care and cripple economic development initiatives by raiding the state’s economic development MegaFund.  This is nonsensical.  So then let’s say the TOPS amendment passes, which I strongly believe it will:  We will have unnecessarily made these cuts and raided the MegaFund of $80 million, just to turn around after October and find ourselves with upwards of $92 million in extra funds in hand.  This is not financial planning.”



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