Removing uncertainty from the state budget

A story in a Baton Rouge newspaper reports various proposed efforts to balance the state budget for the fiscal year beginning July 1.

As of last week, the revenue shortfall for the next fiscal year stood at $1.4 billion. Today, the Revenue Estimating Conference is expected to increase that shortfall by at least $100 million or more, as well as reduce the projected revenues for the current fiscal year. The latter will necessitate immediate mid-year budget cuts.

Our duly elected state leges appear not to know what questions to ask Commissioner of Administration Kristy Nichols regarding her statements.  Perhaps they are just reluctant to ask for fear of retaliation (loss of committee chairs, pet projects, Pentagon apartments, taxpayer-funded junkets, etc.).

While I don’t have the answers, I certainly have some questions that might benefit the citizens of the state in preparing for the future of tax/fee increases and reduction in necessary services. Perhaps, foolishly, I’m not in fear of Ms. Nichols.

Kristy Nichols said: Specialists looking at the state’s systems identified another $200 million or so in savings. There are other reductions and small pools of money that can be found, and there is still some property to sell.

Nichols is required by law to submit the budget next month to the Joint Legislative Committee on the budget so why not start asking now:

•Are these “specialists” the firm of Alvarez and Marsal?•If not, who are they and how much did we taxpayers pay them?•Where is the list of specific savings?•Are the savings one-time or continuing?  In other words, will additional reduction be necessary the following fiscal year to replace those in FY16?•Exactly where are these “small pools of money” and how much is in each?Kristy Nichols goes on to say: But that leaves the state about $1 billion short for fiscal year 2016, which begins July 1. Questions:•From where, specifically, will the $1 billion savings come?  Where is the list?•Are the savings one-time or recurring?•What specific properties are proposed to be sold?  What is the appraised value of each?  Are there buyers?  When will the sales be finalized?  If they aren’t finalized during FY16 what will be cut from the budget?•By definition, revenues from property sales are one time revenues, how will they be used offset the $1.4 billion revenue shortfall in the Operating Budget (recurring expenses)?•Specifically, what additional fees on college students are being considered and how much will they be?   Specifically what new or increased fees for services are being considered?It’s easier to predict when the next hurricane will hit south Louisiana than Louisiana’s next budget crisis.Not knowing the answers to the above questions makes it impossible for us citizens to prepare.

Knowing these answers in advance is of particular important to businesses.  The bane of business is uncertainty.

Perhaps some of the business trade groups will support this effort to get answers.

 

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