The Louisiana Legislature failed to implement long-term financial solutions while balancing the fiscal 2012 budget, Treasurer John Kennedy said last week in a letter to the editor sent to media outlets in the state.

Lawmakers plugged fiscal 2012’s projected $1.5 billion revenue hole with a variety of maneuvers, Kennedy’s letter noted.

“But almost nothing was done to reform state spending in a way that solves our long-term structural fiscal problems,” he wrote. “Until we address these shortcomings, Louisiana state government will continue to lurch along, living paycheck to paycheck and budget crisis to budget crisis.”

Kennedy said the legislative solutions included taking $424 million of state funds dedicated by law to specific uses and spending it on other things, such as Medicaid, as well as reducing spending by $225 million “by not funding certain as-yet-undefined 'inefficiencies’ in state government.”

The state payroll is too large, he said in the letter, with 22% of managers overseeing just one employee.

Kennedy also complained there are too many state employees and that taxpayers last year paid for 900,000 visits to expensive emergency rooms for routine care. He said too many colleges offer the same programs and that there are more consulting contracts than necessary.

The revenue shortfall would have been even larger if the Legislature had not raised tuition at state colleges and universities, he said. The treasurer added that higher-than-expected revenues eased a shortfall situation that had been estimated at $1.6 billion.

The $25 billion state budget that went into effect July 1 eliminated 3,500 positions and kept state aid to local education at the same level as the previous two years.

Louisiana’s general obligation debt carries ratings of AA from Standard & Poor’s and Fitch Ratings, and an equivalent Aa2 from Moody’s Investors Service.

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