Jindal Scouts Fixes for Louisiana’s $1.6B Budget Shortfall in 2012

DALLAS — Gov. Bobby Jindal outlined plans to legislative leaders Thursday that would generate revenue quickly as Louisiana faces a $1.6 billion hole in the fiscal 2012 general fund budget.

Jindal said the package could provide more than $800 million in one-time revenues for the next fiscal year, which begins July 1. The shortfall results from a combination of lower tax collections, the expiration of federal stimulus programs, and higher health care costs.

Louisiana could generate an up-front payment of $400 million by selling several state-owned office buildings in downtown Baton Rouge while continuing to occupy them under a lease-purchase agreement, Jindal said. Another $250 million could be raised by selling bonds supported by future increases in state lottery earnings.

Lottery revenue is currently dedicated to public education. Other opportunities include privatizing the health plan for government workers, which Jindal said could generate $100 million, and selling state-owned, privately operated prisons in Allen and Winn parishes for up to $60 million.

“Some combination of these ideas could help us shrink that gap [and] further protect priorities such as education and health care,” the Republican governor said.

Jindal said the proposals are worth studying, but might not be part of the fiscal 2012 executive budget he is scheduled to present to the Legislature in March.

“These ideas are all at a very initial point,” he told reporters at a news conference after the meeting. “We’re not endorsing any of these ideas yet.

He said the proposals would help shrink the revenue shortfall and merit further evaluation, but do not provide all the answers. He indicated that significant budget reductions are going to happen with or without them.

“This is not a silver bullet,” Jindal said of the proposals. “These ideas don’t resolve our budget challenges. But if they make sense, they could be part of our multi-year effort to downsize our government.”

Jindal met for more than an hour with Louisiana House Speaker Jim Tucker, Senate President Joel Chaisson 2d, Sen. Mike Michot, chair of the Senate budget committee, and Rep. Jim Fannin, who chairs the House budget committee.

Tucker said it was unlikely the governor’s proposals could be achieved before a balanced budget must be presented to the Legislature, which convenes April 25, several weeks after Jindal is required to propose an operating budget.

The state might not even be able to use the additional revenue in fiscal 2012, Tucker said. The official Revenue Estimating Conference might be reluctant to certify the funds generated as continuing revenue, he said. If the panel identifies the money as one-time revenues, it cannot be spent and is required by state law to be deposited into the budget-stabilization fund.

Jindal has been critical of earlier uses of one-time income to pay annual expenses, but said the state needs help in overcoming the current revenue crisis. The revenue picture should improve as the economy strengthens, he said.

“Using these dollars while we shrink government is very different than using them to grow government,” Jindal said.

The $25.6 billion fiscal 2011 budget includes $7.6 billion of general fund revenue. Jindal asked state agencies to prepare for a 35% cut in next year’s appropriations as a worst-case scenario.

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