Thursday, 21 August 2014 15:30

Kennedy says Jindal fix for 1.2B hole: “trust me”, no consults reductions

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kennedy-inaugIn part two of a three-part Google Hangout webcast interview with Louisiana treasurer John Kennedy, the discussion turned to the Louisiana budget deficit and the state’s consultant contracts.  In part I of the interview, as he has done so in the past, Kennedy, pointed out that Louisiana’s budget obligations have been met by using budget gimmicks, one-time monies, depleting various dedicated trust accounts, severely cutting education while allowing bloated government consulting contracts to prosper.

 Worse, over the past recent years, the Jindal administration has missed budget targets, thus, needing to engage in mid-year cuts.  However, the worse might be ahead with a whopping $ 1.2 billion dollars hole anticipated and no public plan for the fix.  

Also, for years, Kennedy has urged the reduction of state consultancy contracts, via legislation. Up until this session, those efforts have not met success.  This spring, however, the Louisiana legislature unanimously approved a reduction but Governor Jindal vetoed the bill.

Below is the transcript and the video of the second part of the John Kennedy interview:

BUDGET DEFICIT{snippet 96}

SABLUDOWSKY: I see, so in terms of numbers, I mean, I've heard things about we might be a million dollars in the hole, billion dollars in the hole next year do you have any feel as far as what that hole might be in terms of the budget?

KENNEDY: It looks like right now it is going to be 1.2 billion dollars. And i based that upon the fact that the current budget which started July 1 is about 25 billion.  As you know Steve, it contains 992 million dollars of one time money. Which means we'll spend it this year and this time next year that 992 million dollars will be gone but the expenses that it paid for will still be there.  We'll start out with about 1.2 billion in the hole. How will they fill the hole I don't know, the administration says it has a plan.  I don't know the detail of the plan. It is basically at this juncture, "trust me".  I hope they do have a plan.  I hope they can achieve their plan by reducing the spending in healthcare without attacking quality of care and it can be done. I hope they don't tear the guts out of our universities again.  We have cut since 2008, after the tax increases, the tuition increases, we cut higher ed about 700 million dollars and I don't know how UNO and LSU and Southern and our other universities are making it.

KENNEDY: But the administration has not shared what its plan yet for filling the holes, so we'll see.  I'm obviously worried about it.  I hope we don't have midyear budget cuts. We had midyear budget cuts for the last six years.  What we desperately need in state government is some budget stability. And, we have not achieved that in a while and until we do we won't be able to fix our healthcare system, we won't be able to lift up our schools and we're not going to be able to build the roads that we need to be built. 


SABLUDOWSKY: I see.  Now, I know that you have been trying to reduce the state contracting, in terms of the number of contracts that we let. The legislature actually passed legislation to do so but the governor vetoed it, am I correct?

KENNEDY: Yes, we had a bill again this year, it was the third time we presented the bill and this year it passed--to direct through the legislative budget committee, that all the agencies in state government reduce their spending on consultants.  We have, I don't know, tens of thousands, nineteen-thousand consulting contracts.  Most of them with out-of-state companies.  Some of them add value and a lot of them don't and everybody knows that.  The legislature voted unanimously, both the house first and then the senate voted unanimously, to achieve some savings by reducing consulting contracts.   Basically our goal was a modest ten percent, which i thought would be a good start.   I'd like to do more but that is what i could get through the legislature. I think it would have saved a minimum of a hundred million, probably a lot more if we did it right. The money was going to be spent on our universities, try to help them out. And, the governor vetoed the bill, so we'll be back next year.

SABLUDOWSKY: What was the reason for the vetoing.

KENNEDY: Bobby didn't call me about it.  He vetoed.  Based upon his comments in the paper, I sense he believes it is inconsistent with his privatization plans.  I understand his point of view, I just don't agree with it.  I don't think it had anything to do with privatization. I think it had to do with spending less money on these out-of- state consultants and using the money for higher priority, which in my opinion, was education. 

SABLUDOWSKY: I see. You mentioned that he hasn't talked to you about it.  When was the last time you talked him, may i ask?

KENNEDY: Well, every governor has his own management style.  I've served with four of them. Governor Jindal is not a micro manager. He is a macro-manager. He does tend to interact a lot directly.  He goes though staff.  I, uh, let me see.  I think, the last time I actually spoken to the governor was probably 18 months, two years, something like that.

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Stephen Sabludowsky | This email address is being protected from spambots. You need JavaScript enabled to view it.

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