Wednesday, 01 June 2011 03:15

Louisiana Fiscal Conservative Legislators Rule The Budget Road

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Louisiana LegislatureThe confusion and frustration that engulfed the House of Representatives the day before could not dim the sunny attitude and beaming smile of Rep. Brett Geymann.

"I think it's great!" exclaimed the Lake Charles Republican on the morning after debate on the state's operating budget ground to a halt before it began.

"This was something we had to go through," he said. "We'll adjust to it."

Indeed, hours later, after separate meetings of caucuses, the House came together to break its deadlock and then pass the budget that evening. That got the $25 billion appropriations bill back on track and to the Senate, but with a strange new outrider called the Geymann Rule.

Earlier that week, an unusual coalition of fiscal hawks and the Black Caucus formed a majority to pass a House rule, co-sponsored by Geymann and his desk mate Rep. Jim Morris, R-Oil City, to require a two-thirds vote to pass a spending bill that uses one-time revenue.

The two Republicans were fed up by the alleged fiscally conservative Gov. Bobby Jindal's balancing the operating budget with dollars that will not be available the year after. That includes cash from lawsuit settlements, the sale of state assets and the refund of economic development incentives from companies that did not meet hiring goals.

Besides forcing more fiscal discipline, setting the bar higher also gives conservatives some political insurance against being jammed with a bigger spending bill coming back from the Senate and the governor getting a House majority of Democrats and moderate Republicans to accept it. Black representatives like the new rule because it gives them more leverage than they have had in drafting the budget.

In order to get his rule passed, Geymann had to put some slack in it by providing an exception for years when overall revenue declines, like in the coming fiscal year. That allowed the House to spend most of the one-time money in the governor's budget by majority vote, but $92 million was blocked by the new two-thirds rule, causing that amount to be chopped out of healthcare.

Now that the budget is in the Senate, its members are not bound by the rule named for some guy they've never heard of and likely will waste little time in breaking it. The governor's allies look to restore the last $92 million cut and most or all of $139 million previously excised by the House Appropriations Committee. But in the inevitable end-of-session showdown, with the new two-thirds threshold in the House, the advantage shifts to fiscal conservatives there.

For now, the Geymann Rule rules, but should it?

One can make a logical argument for using only recurring money for recurring expenses, and not to get caught short relying on one-time money that won't be there next year. Better to use windfalls for one-time expenses, whether additional pension debt service or highway construction.

But what largely has gone unsaid is that most of what's defined as one-time money actually will be back year after year. In forming his budget, the governor swept up $341 million from over 50 statutorily dedicated funds. That is out of about 450 funds the Legislature has established over the years and into which will flow about $4.6 billion from dedicated taxes, fees and self-generated revenue in the coming year. Jindal's budget team says that spending requests have been met for the dedicated funds, and what was taken largely will be replenished in the coming year.

The state's budgetary policy often is faulted for dedicating so much money, which leaves unprotected areas like higher education and healthcare to take the brunt of cuts in lean years. About $1.7 billion in constitutionally dedicated funds already are off limits. The Geymann rule now restricts the Legislature from tapping into statutorily dedicated funds to take some pressure off higher education and healthcare.

So we have a conflict of two conservative principles: to limit of use of one-time money and to increase budgeting flexibility in order not to force deeper cuts to higher education and healthcare.

Fiscal conservatives are not used to being in the driver's seat, but the challenge now rests with them to follow their new rule of the road but to keep from hitting the ditch.


by John Maginnis

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