DALLAS — Louisiana Gov. Bobby Jindal says his proposed fiscal 2014 budget reflects a “more effective and efficient” state government, but Treasurer John N. Kennedy calls the spending plan “a fond illusion” that is structurally unbalanced.
The budget relies on revenues from state property sales and other one-time collections to meet recurring expenses, Kennedy said, and unrealistically assumes there will be enough money when the bills are due.
“There’s a better way,” he said. “Don’t spend more than you take in, and when you do spend money, spend it on things you need, not things you simply want.”
The state will face another series of mid-year spending cuts if the Legislature accepts Jindal’s executive budget proposal, Kennedy said in an opinion column released Monday.
“Call this budget what you like: a fond illusion or smart accounting,” Kennedy said of his fellow Republican’s spending plan. “The result will be the same: mid-year budget cuts for the sixth year in a row, because the budget is not balanced.”
Commissioner of Administration Kristy Nichols, Jindal’s chief budget aide, issued a point-by-point rebuttal. Kennedy is “a big government defender of the status quo,” she said.
“We appreciate the treasurer’s opinion, but given his long track record of half-baked gimmicks and his office’s recent miscalculation of the state’s debt, we will pass on his suggestion,” she said.
A recent report on Louisiana’s net state tax-supported debt was revised after it was determined that one bond issue had been counted twice. Three GOP state representatives echoed some of Kennedy’s criticisms at a joint press conference in Baton Rouge on Monday.
Cameron Henry, Thomas Carmody and John Schroder criticized Jindal’s plan to use $60 million of the savings from a proposed refinancing of the state’s tobacco settlement bonds to fund a college scholarship program in fiscal 2014.
“I have spoken with a good number of the members of the Legislature, and each senator and representative has expressed concern over how this budget has been cobbled together,” Carmody said. “The proposal regarding use of tobacco settlement funds is yet another example of just how concerned we should all be.”
Henry said he backs the tobacco refinancing but not the use of the one-time revenues for the scholarship program.
“It’s what you do with the savings,” he said. “I want members to be aware of where the nonrecurring money is and let them know we’re creating a problem.”
Trustees of Louisiana’s Tobacco Settlement Financing Corp. gave preliminary approval last month to Jindal’s plan refund $823.1 million of bonds backed by the state’s portion of the 1998 tobacco settlement. Nichols said the refunding should provide savings of $85 million. “With interest rates at historical lows, refinancing the state’s tobacco bonds not only produces substantial savings for the state, it’s also a financial deal that’s in the best long-term interest of the state,” she said.
Jindal’s proposed $24.7 billion executive budget for the fiscal year that begins July 1 is $1 billion less than in fiscal 2013, a reduction of almost 4%. “Louisiana continues to chart a path that expands economic opportunities for our people and protects education and health care funding while reducing government’s footprint, not only shrinking its size and cost, but making government more effective and efficient,” the GOP governor said.
