Green Articles


Jindal's budget plan stays the course
State spending levels would rise by 3.5 percent under blueprint

By Jan Moller : Times-Picayune : March 1, 2008

BATON ROUGE -- Gov. Bobby Jindal presented the Legislature with a $30.1 billion executive budget Friday that keeps most state agencies operating at current levels, adds money to some health care and economic development programs, and eliminates more than 1,000 vacant jobs from the state payroll.

Commissioner of Administration Angele Davis, Jindal's chief budget architect, said the spending plan was crafted as a hedge against the likelihood that state revenue will level off in the coming years as Louisiana's overheated hurricane-recovery economy begins to cool.

"The responsible thing for us to do today is to prepare for those future years where we see our revenues declining," Davis said, calling it "the beginning of a new direction" for state government.

The governor's executive budget serves as the blueprint that lawmakers will work from as they craft a spending plan for the 2008-09 budget year that starts July 1. The budget plan assumes that legislators will agree to Jindal's request for $110 million in business tax breaks, which will be one of the topics of a special session that the governor has promised to call for March 9.

Although Jindal labeled state government spending as "out of control" during his campaign, his budget would expand state general fund spending by $550 million, or 6.3 percent, over current levels. Overall state spending would fall by about $4 billion, mainly because fewer federal hurricane-recovery dollars will flow through state coffers as the Road Home hurricane rebuilding program winds down.

When all federal hurricane-recovery money is backed out, total state spending for next year is projected to rise by $760 million, or 3.5 percent, over current levels.

"Not everybody got everything they wanted. But we feel, from our perspective, that everybody got what they needed," Davis said.

Leftover surplus

The spending increases might be inevitable, as Jindal took office with record state revenue at his disposal and had less than eight weeks to put together his first spending plan. He has ordered each of his Cabinet secretaries to complete a detailed "audit" of their agencies' spending to identify underperforming programs, but those reviews are not yet complete.

In addition to record general-fund revenue, the state has a $1.1 billion surplus left over from last year, and a $981 million anticipated surplus in the current budget year.

Last year's surplus will be spent during the upcoming special session, where much of it will be used for a variety of one-time expenses such as transportation and port projects as well as paying off debt in the state retirement systems.

All but $98 million of the current-year surplus, meanwhile, would be shifted into next year's budget, where it would be used to pay for ongoing health care programs, student scholarships and other spending that the administration describes as "one-time" expenditures.

Potential controversies

One area of potential controversy involves $307 million that Jindal wants to add to a "mega-projects" fund within the Department of Economic Development, used to lure large-scale industrial projects that bring at least 500 new jobs and $100 million in capital investment.

The fund was created under former Gov. Kathleen Blanco and already has $140 million, which has not yet been spent since Louisiana has thus far been unable to attract any company large enough to qualify for the incentives.

Economic Development Secretary Stephen Moret said his office is in negotiations with six companies on potential projects that would be large enough to tap the fund. But Sen. Mike Michot, R-Lafayette, chairman of the budget-writing Senate Finance Committee, said that money might be better used to support existing businesses.

"I know there's concern among many legislators" about the mega-projects fund, Michot said.

Legislators also questioned the $320,000 annual salary that Jindal has requested for Moret, which would be almost $75,000 per year more than the $245,744 a year his predecessor, Michael Olivier, was paid. Davis said Moret took a pay cut when he agreed to leave the Baton Rouge Area Chamber of Commerce to join the Jindal administration. "We recruited him, and we believe in paying people a competitive salary," Davis said.

Another potential flashpoint involves a $10 million "school choice initiative" that would give state-financed vouchers to allow some New Orleans area students to attend private schools. Vouchers are a perennial sore point for teachers unions and their supporters who argue that they siphon students and resources from public schools.

Davis said the details of the program are still being worked out, and refused to characterize it as a voucher program, instead referring to it as a "scholarship" initiative as Rep. Karen Carter Peterson, D-New Orleans, pressed for more information.

Health care, education

In other areas of the budget, Jindal proposed continuing spending initiatives begun under his predecessor, Gov. Kathleen Blanco. On health care, the budget would maintain a $120 million financing pool set aside after the 2005 hurricanes to help private and community hospitals defray some of their costs for treating the uninsured. Nursing homes and other private providers that see Medicaid patients would also get more money in the budget.

One of the biggest changes in health care is $50 million to provide home- and community-care services for 2,025 children and adults with severe developmental disabilities. The money was set aside under a new law that mandates putting 5 percent of any surplus money recognized in the middle of a fiscal year into a fund, to be used to reduce the backlog of people waiting for home-care "waiver" slots.

Public-school teachers, colleges and universities would get money to keep pace with pay, and colleges and universities would get enough money to keep pace with the spending milestones set last year. The average public school teacher would get about a $1,000 annual raise, costing the state around $70 million, while $34.7 million would be used to keep financing for public colleges and universities in line with their Southern peer institutions.

Administration officials said the money for teacher pay would keep Louisiana's educators at the Southern average, but Steve Monaghan, president of the Louisiana Federation of Teachers, said the Southern average is a "misleading" target that neglects the fact that teachers in some parishes earn far less.

The state Board of Ethics will get $1.6 million in new money to implement changes ordered by the Legislature in its just-completed special session, while the Division of Administrative Law would get $267,000 to pay for the extra duties it will be taking on in ruling on cases prosecuted by the ethics board.

Overall, the budget eliminates nearly 1,465 state jobs that are currently unfilled. But it creates nearly 400 jobs in other areas, for a net loss of 1,057 state positions. Nearly half of the jobs being eliminated are in the Department of Health and Hospitals. Agency spokesman Bob Johannessen said the biggest effect will be felt in state-run developmental centers, which would lose about 140 unfilled positions.

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The Associated Press contributed to this report. Jan Moller can be reached at jmoller@timespicayune.com or (225) 342-5207.