A version of a bill to reduce the state’s consulting contracts that was unanimously passed by both chambers of the Legislature last year before being vetoed by Gov. Bobby Jindal appears to be heading back to his desk.
This is the fourth attempt by the duo of Treasurer John Kennedy and Rep. Dee Richard, No Party-Thibodeaux, to cut the amount of money the state spends on professional, personal and consulting service contracts.
Earlier efforts suggested across-the-board reductions to such contracts, but the House Appropriations Committee approved without objection last week the latest incarnation. HB 30 would instead allow lawmakers on the Joint Legislative Budget Committee to reject or approve practically any consulting contract with an annual value of $40,000 or more. The money saved by rejecting contracts would then be placed into the proposed Higher Education Financing Fund.
If approved, Kennedy said the bill would allow lawmakers to have the final say on as many as 1,700 contracts worth $2 billion, based on an annual report from the Division of Administration, which reviews contracts. Division officials, however, said the number would be closer to 150 or so contracts valued at $21 million.
The debate drew a distinct line in the sand, with the bill’s author and Kennedy contradicting the arguments of the administration.
The treasurer cited several examples of contracts lawmakers might be in a position to reject, thus creating more money for higher education, like $413,000 spent with Rutgers University in New Jersey to study the aftereffects of the BP oil spill. While there might be some benefit to the research, who should receive it is the big question, he said.
“Should we be giving that money to McNeese or ULM or LSU or Southeastern?” Kennedy asked.
Other questionable contracts lawmakers didn’t get to review in the past, according to Kennedy, included one to promote seat belt usage for the Hispanic population of Rapides Parish and others directing taxpayer money to groups like Young Audiences of Louisiana, God’s Little Angels, Little People’s Play Station and Angels in Training. Kennedy cited nearly $47 million in coastal restoration contracts this fiscal year that lawmakers could have negotiated.
“Don’t tell me they can’t do the job for 10 percent less,” Kennedy said.
Officials with the division argued that the bill would extend contracting periods by 30 days at a minimum and up to 60 days at most for each contract. They complained about being micromanaged by lawmakers and labeled the savings touted by Kennedy and others as unrealistic.
Some lawmakers also voiced concerns about dedicating the savings only to colleges and universities. “The biggest problem we have is lack of flexibility,” said Rep. John Schroder, R-Covington. “I support higher ed as much as anyone, but we cannot keep dedicating all of our money.”
Lottery officials still concerned about budget plan
As lawmakers move closer to the end of their session that adjourns on June 11, the possibility of using $27.6 million from unclaimed lottery winning to plug an ailing budget remains on the table as the legislative clock ticks down. Lawmakers, however, have yet to trigger the option by filing the required legislation or amending the state budget for next fiscal year.
The proposal came from Gov. Bobby Jindal’s administration prior to the session, with the money going to elementary and secondary public schools. The move would also help free up general fund dollars for higher education and health care. Rose J. Hudson, the president of the Louisiana Lottery, said current law already directs plans for this money — it must be used for future scratch-off prizes or promotions. “Simply put, unclaimed prize funds belong to Lottery players,” Hudson said in a written statement. “As you can imagine, our players love this.”
By funneling the unclaimed money back into prizes, she said the Louisiana Lottery has increased scratch-off sales more than 40 percent the last five years.
“In a nutshell, more sales equals more money for the state,” she said, noting that 35 percent of Lottery revenue is constitutionally dedicated to K-12 public education.
Removing the Lottery’s ability to use unclaimed prize funds to supplement scratch-off prizes would cause sales to decrease, according to a recent performance audit report conducted by the Legislative Auditor. The resulting net annual loss in state revenue could be as much as $16 million.
“It causes me concern that in the rush to patch a gap, we would unintentionally create a chasm,” Hudson said.
Gaming industry opposes fantasy bill
Rep. Joe Lopinto, R-Metairie, weeks ago moved his push to legalize fantasy gaming — like football, basketball and baseball — to the Senate, where he had hoped lawmakers would agree that fanatics should be able to pay to play and win prizes if they’re good enough.
But following HB 475 to the Senate, after a 71-20 House floor vote, was opposition from Louisiana’s legal gaming community.
Alton Ashy, lobbyist for the Louisiana Video Gaming Association, said the legislation could create unneeded competition for an industry that is already heavily regulated and paying taxes. Moreover, he added, there could be problems with allowing players to participate in a one-day league, as opposed to an entire season, and there are no mechanisms in the bill to ensure operators are paying taxes to the state.
“It could lead to full gaming sites with little or no regulation,” Ashy said. “We’re happy to try to work with Rep. Lopinto on this bill, but we have some serious concerns.”
Lopinto said Louisiana is only one of five states that prohibit fantasy games and his legislation tracks federal language. Sometimes prizes amount to nothing more than a t-shirt, he added, and Louisiana’s 1997 Internet gaming law shouldn’t apply in this instance.
“I’m trying to change an antiquated law,” Lopinto said. The bill has been assigned to the Senate Judiciary B Committee, but Lopinto said the added opposition may stall it there.
They Said It
“I was stupid enough to run for representative and to think I can come down here and make a damn difference.”-Rep. Steve Plyant, a former sheriff, saying he looks forward to returning to his old office one day “I haven’t learned much down here but I’ve learned to count.”-Appropriations Chair Jim Fannin, on a budget amendment with 58 co-authors
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