Rep. Jones says state's budget squeeze tightens as 'wizardry' continues

Louisiana’s fiscal decisions are past kicking the can down the road and have become a case of kicking the barrel down the road, a barrel that has been drained of resources, state Rep. Sam Jones, D-Franklin, said Monday.
By not making hard choices this year or in recent years when there was room to maneuver, those choices with few options will be forced on the next governor and future legislators, Jones said.
This year there will be few, if any, winners in the state after the budget passes with many losers, Jones claims. He said health care, hospitals, universities, public education, senior citizens, people without insurance and others will continue to feel the pain of underfunding.
“The only real winners will be industrial and business interests who have not had their taxes raised, which I agree with,” Jones said.
Jones made those comments in the course of discussing the passage of the state budget. He said Gov. Bobby Jindal continues the practice of raiding trust funds to pay for unrelated programs and services and the state may again be put in a position that mid-year cuts have to be made.
He said after raiding about $3 billion in trust funds over the past seven years, the state will be forced to quit that tactic in the next budget battle, because those trust funds have been wiped out. Tapping trust funds to the bottom has not been done solely by Jindal, as lawmakers must approve the budget but they have neither stopped the raids nor planned for the looming financial cliff they face, Jones said.
“The big cliff is next year,” Jones said of the challenge facing the legislature in the next budget battle. An example he gives is the depletion a trust fund for elderly services created with an infusion of federal cash during the Clinton presidency.
When the fund was originally set up, the principle was expected to mainly be untouched and the Legislature would use the interest and investment earnings, thereby providing decades of funding for nursing home care and other health care services, Jones said. Instead the Jindal administration, and lawmakers who approve the budget, kept raiding principle to cover holes in the health care budget and finance Medicaid services at nursing homes.
“There was almost $850 million in the senior citizens Medicaid Trust Fund when Gov. Blanco left office, but this budget takes away the last of that money.”
But the budgeting wizardry has not stopped there, Jones said.
“The governor has been sweeping different trust funds and now they are all swept clean,” Jones said.
The Senate continues to discuss the budget. Final Senate and House approval is needed by June 2 to keep a special session from being called. Jones foresees discussions and battles in the next two weeks, but he expects last-minute compromises will be made that will allow the Legislature to adjourn with a budget the governor will sign.
That will still leave hard choices in funding and revenue for the next session. He said next year’s budget could be close to a billion dollars short
“I believe we should be making some of those choices now and interrupting some of the damage this year,” Jones said.
Jones does not propose any new taxes to cover the $960 million that will be needed to fill the shortfall he expects. He would rather take a fresh look at lucrative tax credits issued by the state to entities that do not need them to remain profitable in the state.
He points to a Depression era credit to insurance companies the state passed to keep hard currency in the state. The credit is neither needed nor fitting in today’s banking environment and costs the state $200 million annually, Jones said. He said removing the 1934 credit from the books has been opposed by the insurance industry.
Jones questions the millions given to Tom Benson for the Saints and Pelicans as unnecessary giveaways.
Jones claims a significant savings could be realized by making 5 to 10 percent across-the-board reduction in value to contracts the state enters. Rebates to certain private operators of private schools, which no one else gets, should be discontinued, he said.
These and other similar measures could account for half to two-thirds of the projected budget shortfall for next year, he said.