Bill seeks to create budget flexibility

• By MARSHA SHULER
• Advocate Capitol News Bureau
• Published: May 19, 2009 - Page: 1A

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A Jindal administration-pushed constitutional amendment that would provide greater budget-cutting flexibility when the state is facing financial crisis cleared a state Senate panel Monday.

Gov. Bobby Jindal testified the change would help spread the budget-cutting pain across all state agencies. Higher education and health care are the only major areas unprotected from the budget ax.

Louisiana expects $1.3 billion less state revenue for spending in the fiscal year that begins July 1.

“And there will be multiple years of budget challenges,” Jindal said. “We need to do everything we can to mitigate impacts on health care and higher education.”

The Senate Finance Committee approved Senate Bill 1, which would allow up to 10 percent — rather than the current 5 percent — of each state statutory dedication to be cut when there is a budget deficit. Dedications protect the funding for specific programs in the state constitution or in state’s statutes.

The panel also endorsed Senate Bill 2 that would eliminate state law that says no more than 5 percent of statutory dedications can be cut over two years.

The proposals brought support from such groups as Louisiana’s higher education boards, the Louisiana Hospital Association, the Louisiana Nursing Home Association, the Council for a Better Louisiana and the AARP.

Transportation interests testified against the move — saying it could expose the Transportation Trust Fund to the up to 10 percent cuts. Some 16 cents of Louisiana’s gasoline taxes flow into the trust fund for road and bridge projects.

Currently, $3.7 billion of state funds in Louisiana’s $28 billion budget are dedicated — $1.9 billion constitutionally and $1.8 billion statutorily.

That takes too much money off the table for potential budget cuts, Jindal said. Allowing for cuts of up to 10 percent in those funds would give the governor and Legislature more options in dealing with budget cuts, he said.

“We have used the authority we have got correctly,” Jindal said. “In terms of authority, these bills do not increase the unilateral authority of the administration.”

Driving Louisiana Forward Executive Director Jennifer Marusak and Associated General Contractors lobbyist Derrell Cohoon said Louisiana voters approved earmarking the gasoline tax for transportation.

“We believe we owe it to the public that we spend the Transportation Trust Fund on what voters intended it to be  spent on,” not diverted to other budget uses, Marusak said.