Analysis: Jindal Patches Way Through Another Year

BATON ROUGE (AP) — Gov. Bobby Jindal's administration seems to have scraped together enough money from the state's couch cushions to rebalance this year's $25 billion budget without deep, damaging cuts to services.

         The unveiling of the Republican governor's plan to close a $180 million midyear deficit had so few reductions beyond cutting money for vacant jobs and nonessential supplies that it has drawn little resistance from lawmakers.

         "They mitigated those cuts as much as possible," said Rep. Jim Fannin, R-Jonesboro, chairman of the House Appropriations Committee.

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         But that cobbled-together list of financial patches for this year only gets the state through the next six months or so — if all the funding comes through as projected and if the state's regular tax revenue streams don't nosedive.

         Another financial crisis already looms. Next up for Jindal and lawmakers, a $1.4 billion shortfall is estimated for the budget year that begins July 1.

         Jindal has faced perpetual budget woes throughout his two terms in office. The national recession hit as a series of hefty tax breaks approved by the governor and his predecessor stripped millions from the budget. The state has struggled to recover.

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         To keep the budget balanced and avoid anything he considers a tax hike, Jindal has turned to large amounts of piecemeal financing. He's used dollars from tax amnesty programs, pharmaceutical settlements, insurance payments and fund balances to pay for programs and services. Trust funds have been spent down. State property has been sold.

         Lawmakers have agreed to most of the ideas, even as they acknowledged the patchwork method of budgeting keeps state government humming along for short periods before they must scramble for new sources of financing.

         Supporters of the budget shell game say it's better than cuts, protecting critical services and stopping deeper slashing to public college campuses that have seen their state funding drop by $700 million since 2008.

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         Critics say the governor and the Legislature need to tackle structural change in state spending and tax policy to get the state away from using gimmicks to balance its budget and to end recurring financial troubles.

         With Jindal only one year from the end of his term, however, any attempt at change likely rests with Louisiana's next governor. How to balance the budget is expected to be a hot topic on the 2015 campaign trail.

         For now, Jindal and lawmakers seem to be just trying to get by.

         "We worked closely with state agencies to create a responsible plan that balances the state budget without raising taxes and without affecting critical services," Commissioner of Administration Kristy Nichols said of Jindal's deficit-closing plan.

         The latest financial problem came when Louisiana's income estimating panel cut the revenue forecast. Economists said they expected the state treasury to bring in less money than previously projected because of dropping oil prices and weak growth in personal income taxes.

         Nichols said the state could offset nearly three-quarters of the $180 million shortfall with unspent dollars identified by the Jindal administration.

         A tax amnesty program brought in more dollars than expected. The state received an insurance settlement tied to Hurricane Gustav. Parcels of state property were sold. Lawmakers hadn't spent all the money coming from recently raised penalties on uninsured motorists. The voucher program that sends students to private schools with state tax dollars had fewer students than expected. Other unspent dollars were sitting in treasury accounts.

         All of that money could be poured into this year's $25 billion budget to stave off steep cuts elsewhere, Nichols told lawmakers. The dollars will be combined with $50 million in state agency cuts, most of which come from not filling vacant jobs, reducing contracts and spending fewer dollars for travel and supplies.

         It was the sixth time in seven years that the Jindal administration had to make some midyear cuts to rebalance the state budget. Last year, the administration only avoided cuts by using money from another tax amnesty period to plug a deficit.

         When lawmakers return for their next regular session in April, they'll be scrounging around again with the Jindal administration for another hodgepodge budget fix.

         – by AP Reporter Melinda Deslatte

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