La. Legislative Panel Adds $1.6B to Budget but Stalls on $827M

Louisiana’s budget has been boosted by $1.6 billion, money lawmakers can spend in a special session scheduled to start Dec. 8. But the Senate president blocked attempts to enrich financial forecasts by another $827 million, complicating Gov. Kathleen Blanco’s plans for the special session.

Blanco, who called the session, wanted lawmakers to spend $2.4 billion in the session, proposing pay raises, tax breaks, insurance rebate checks and other spending.

But in a procedural move, Senate President Don Hines – once a Blanco ally who has sparred with the governor in recent weeks – agreed to adjust upward the current budget year by $1.6 billion but refused to recognize an $827 million surplus from the fiscal year that ended June 30.

Hines, D-Bunkie, sits on the Revenue Estimating Conference, a four-member panel that must vote as a bloc to make changes to the state’s general fund budget.

Lawmakers can only spend money recognized by the conference, and Blanco was banking on the new dollars this year and the surplus from last year for her spending plans. Among the items she wanted to fund with the extra money are road improvements, building repairs around the state, retirement debt payments and aid to local governments struggling after the hurricanes.

Hines said he was following the law to recognize a surplus, and said several steps must be followed before the revenue panel could officially sign off on the surplus figure, including formal publication of the state’s finances from last year.

“The world’s not coming to an end,” he said of his refusal to agree to the surplus number.

Commissioner of Administration Jerry Luke LeBlanc, the governor’s budget adviser and a member of the revenue conference, said Hines blocked the surplus because of a dispute with Blanco. The Senate president and governor disagreed over whether the state should financially back construction of a sugar syrup mill in Hines’ district. Blanco helped kill the proposal.

“I think it’s clear that’s he (Hines) attempted to misinterpret the law for his own personal agenda,” LeBlanc said.

The revenue estimating panel is made up of LeBlanc, Hines, the House speaker and an LSU economist. Rep. Yvonne Dorsey, D-Baton Rouge, who sat in for the House speaker, said she thinks the surplus will be recognized in time to spend during the special session, and LeBlanc said the administration was reviewing ways to get that done.

The Revenue Estimating Conference could meet again in the coming days or during the special session, but they can only approve the surplus with Hines’ vote since the panel must be unanimous on financial estimates.

“It’s not over ’til it’s over. I think we’ll be back,” Dorsey said.

Hurricanes Katrina and Rita were forecast to devastate Louisiana’s budget. Instead, sales and income tax revenue are higher than expected, as Louisiana residents replace ruined cars and furniture and recovery workers spend their paychecks. Also, booming oil and gas prices are producing more dollars. Budget estimates since the hurricanes have continued to improve.

Lawmakers and nonpartisan groups called for the governor to postpone or cancel the special session, saying they didn’t think the state should spend so much money so fast when the dollars could be spent in a regular legislative session set to begin in April. Several lawmakers said Blanco was trying to play Santa Claus at Christmas.

“We must avoid at all costs the Louisiana tradition of doling out a little bit of money to everybody which results in no major impact for anybody,” said Barry Erwin, head of the Council for a Better Louisiana. “It’s bad policy and it gets us nowhere.”

Blanco moved forward with her session plans, saying they would spur the economy.

“Insurance costs are rising, roads are crumbling, and families are working harder than ever before and many businesses are struggling to stay afloat … We have an unprecedented opportunity to solve some of these problems and we need to act quickly,” Blanco said in a statement when she outlined the formal agenda for the session.

One of the most vocal lawmakers who sought cancellation of the session, however, was Hines. On Tuesday, he again said the governor was trying to move too fast to spend billions of dollars and the Legislature should have lengthy hearings on spending proposals before doling out the cash.

“I just think we’re rushing way too fast,” he said.

Rep. Jim Tucker, head of the House’s Republican Caucus, agreed, saying the budget figures were “mind boggling.” He said the Blanco administration is trying to spend the money quickly to boost the governor’s re-election chances next year and lawmakers should slow down the spending.

“My gut feeling right now is $1.6 billion is a heck of a lot of money and we really, really, really need to stop and say, ‘Time out. Let’s take a look at this thing.’ We shouldn’t be looking to spend $1.6 billion 72 hours from now,” Tucker said.