Monday, February 23, 2015

Monday, February 23, 2015

Budget suspense ends on Friday; Latest midyear cuts win approval; 6.5 million more reasons to reform the film program; and How to pay for transportation needs

 

Budget suspense ends on Friday

The rumors and speculation about what Gov. Bobby Jindal will propose to cut in next year’s budget ends in four days, when his administration reveals its executive budget blueprint for 2015-16. The AP’s Melinda Deslatte tees up the debate, and stops just short of calling the governor a liar.

 

State officials don’t even agree on how Louisiana got into this budget mess. Jindal insists the bulk of next year’s shortfall is because of the nosedive in oil prices and its impact on Louisiana’s treasury through lessened severance taxes and mineral royalties. He told a crowd at a recent Baton Rouge event that the state’s financial problems are “largely due to the decline in the price of oil.”

 

The math doesn’t back up the governor’s assertion, no matter how many times he repeats the explanation.

 

Louisiana’s income forecasting panel dropped next year’s revenue projections by about $300 million because of plummeting oil prices. The larger problem for next year’s budget is the use of $1.1 billion this year in patchwork financing.

 

Latest midyear cuts win approval

A legislative committee agreed Friday to go along with Gov. Bobby Jindal’s recommendations for closing the latest $103 million gap in the current-year state budget. Before that, they narrowly rejected attempts to restore dollars for food inspections and stop a transfer of $6 million from the Transportation Trust Fund to the state police after administration officials said it would only worsen the looming cuts to health-care and higher education in next year’s spending plan. Nola.com’s Julie O’Donoghue reports that some legislators were frustrated because agencies outside Jindal’s direct control are taking much bigger cuts than, for example, the governor’s office.

 

Legislators appeared to sympathize with the statewide elected officials, commenting on how the Jindal administration needed to work better with them. State Rep. Pat Smith suggested that Jindal and his personal staff should consider salary reductions for the rest of the year to help close the budget gap. “The governor should lead by example,” Smith said. Jindal’s chief budget officer, Kristy Nichols, said state agencies have taken a larger portion of the cuts than the departments run by statewide elected officials over the past several years.

 

6.5 million more reasons to reform the film program

A corrupt former movie producer who was imprisoned for bribing the head of the state film program has been awarded $6.5 million in tax credits by an independent arbitrator. As The Advocate’s Gordon Russell reports, Malcolm Petal was sentenced to five years in federal prison for his role in a scandal that also sent Mark Smith, the former head of the state film office, to the clink. But now Petal is free, and claims he is owed money based on a 2004 interpretation of a state law that has since been changed.

 

“So, if you bribe a public official, which Petal admitted to, you can still collect on the favors the public official gave you,” said Robert Travis Scott, president of the watchdog Public Affairs Research Council, who covered the film scandal as a reporter for The Times-Picayune. “Although the arbitration document unfortunately doesn’t address that question directly, that’s essentially the impact of its conclusion. This is a giant, unexplained, gaping hole in the arbitration document and, unfortunately, another sorry chapter in how this film tax credit program has been abused and has damaged the public trust.”

 

Just to be clear: A convicted felon will reap a payday of around $6 million for films in which expenses were deliberately inflated – and approved by a state official who took bribes. But we don’t have enough money to keep the state library open more than two days a week.

 

Maybe that’s one reason the film industry is now planning to come to the Legislature with a package of “reforms.”

 

How to pay for transportation needs

Much has been made recently of the poor condition of Louisiana’s roads – though few ideas have emerged for how to pay for ongoing maintenance and chip away at the state’s $12 billion backlog of needed repairs. With the federal gas tax having lost one-third of its value to inflation, federal and state officials around the country are kicking around alternative ideas for raising money for transportation needs. The AP has a helpful roundup, which includes discussion of toll roads, a fuel sales tax and a mileage tax.

 

 

 

Number of the Day


1,200
Number of waiver slots that allow people with disabilities to receive care in their homes that were frozen as part of the Jindal administration’s mid-year cuts (Source: Department of Health and Hospitals)