St. Charles Herald-Guide

Eliminating mid-year budget cuts

By C.B. Forgotston - January 13, 2012

Mid-year budget cuts to state agencies in recent years have become chronic. Whenever a problem becomes chronic it is time to do something about it.

Thereís nothing on the economic horizon to indicate that mid-year cuts will not be recurring.

Background

Not that the current method of allocation of our tax dollars by the leges is any great shakes, but mid-year reductions exacerbate the problem.

First, the mid-year cuts are required to be made across-the-board as opposed to selective reductions during a lege session.

That is the worst form of budgeting for government. It punishes the agencies that are performing well and rewards those that are wasting money.

Second, with mid-year cuts the state agencies have very little time to react.

Under normal circumstances, any agency head paying attention to the lege budget process has months to prepare for possible budget reductions. With mid-year cuts, they only have days or, at best, a week or so to prepare. That usually results in hardships for those the agencies are supposed to serve.

The culprit

It appears that the primary culprit in the recent mid-year cuts is due to over-estimating state revenues by the State Revenue Estimating Conference ("REC").

Despite the sophisticated economic models available to the Legislative Fiscal Office and Division of Administration, estimating government revenues is not an exact science. The models still require certain assumptions to be plugged into them.

If those doing the estimating were able to precisely predict future revenues, they would likely not be working for the state, but would be making a fortune investing in the stock market.

A solution

A formula should be adopted by the leges to take into consideration prior mid-year budget cuts.

All it will take to eliminate the mid-year cuts is leadership and political courage by the leges. They have to be willing to say "no" to those who want to spend money that the leges know will only be taken away later.

The estimate of state revenues by the REC for the upcoming fiscal year should be reduced by the average of the 3 previous yearsí mid-year reductions.

The worst outcome of the formula would be a surplus of state funds. Such surplus funds could then only be used to reduced the state retirement systemsí unfunded accrued liability; pay off state debt or for capital projects (rebuilding the wetlands, highway construction, etc.).

Mine is just a common sense approach to a problem. Unfortunately, common sense isnít that common at the Capitol.

If you donít like my solution and have a better idea, please suggest it to the leges. Ignoring the problem as is currently the case isnít a solution.

Jindal reduces unemployment

The "Roads Scholar" continues to reduce unemployment in Louisiana.

We just learned that another unemployed, politician will be quickly employed by the taxpayers of Louisiana.

Term-limited and recently defeated for the state senate, Rep. Jane Smith will not miss a single feeding from the public trough. See story here.

Despite mid-year budget cuts to Higher Ed and Healthcare, thereís always room for another "good olí boy" or in this case a "good olí gal" at the public trough.

The more things changeÖ

This latest political hiring follows the hires of Kevin Davis who was term-limited as St. Tammany Parish President and Craig Taffaro who was defeated for reelection as St. Bernard Parish President.

Itís yet to be confirmed what Smithís salary will be, but it the previous political hirings are any indication it will be six-figures. All will be getting increases from their previous feedings at the public trough.

In addition, Smith currently draws $64,000 annually from the Teachers Retirement system and her husband is being paid $94,000 a year as Assistant Superintendent of Bossier Parish Schools.

A good guess is that starting next week, the two Smiths will draw from the public trough approximately $250,000, annually. Not too shabby for a couple of school teachers.

Outrage?

If Edwin Edwards was the governor cutting Higher Ed and Heathcare while employing out-of-work political cronies like Jindal, there would be a huge public outcry. However, with Jindal, there is nothing but deafening silence.

Whereís outrage?

DED reverses out-migration

DED (or whatever it is called today) is bringing a person to Louisiana for economic opportunities.

Wednesday taking a job at DED was Michael Tepper who will be a Research Analyst for the Business Intelligence team. Tepper is relocating to Baton Rouge from Atlanta.

It is unfortunate that nobody currently in Louisiana is qualified for the job.

This new hire helps support Team Jindalís fictional case that they have reversed the out-migration trend in Louisiana. That is, assuming that Mr. Tepper is used a moving van to come to Louisiana.

In this modern world of technology DED still uses statistics from moving van companies to make its case for stopping out-migration. At least it is a step-up from the abacus that used previously.

If the leges will just increase the DED operating budget, perhaps they can hire more out-of-state folks to move here to work at DED.