By State Treasurer John Kennedy

In its recent session, the Louisiana Legislature faced a $1.6 billion budget deficit, primarily due to the loss of one-time federal “stimulus” dollars from the Obama Administration. (The deficit would have been larger had the legislature not raised tuition and fees and had increased state tax collections not been forecast.)

Here’s how the legislature plugged the $1.6 billion hole:

1) The legislature found an extra $50 million in federal money to spend, including FEMA and Community Development Block Grant (CDBG) funds.

2) It took $424 million from dedicated state funds, such as the Artificial Reef Fund and the Louisiana Mega-Project Economic Development Fund, and spent it on other things, such as Medicaid.

3) It took $33 million set aside to pay claims from the Office of Group Benefits, the state’s health insurance program for current and retired state employees, to pay for the general cost of government.

4) It moved 6,028 positions in higher education “off budget” to be funded with “restricted funds” that our universities already have, thereby “saving” $300 million.

5) It extended last year’s mid-year budget cuts into this year’s budget, reducing this year’s budget by $110 million.

6) It eliminated $55 million in “merit” pay raises for classified state employees.

7) It reduced this year’s budget by $225 million by not funding certain as yet undefined “inefficiencies” in state government.

8) It reduced actual departmental spending for operations by $410 million, or .15% of the total budget.

As a result of these maneuvers, the state budget was balanced. But almost nothing was done to reform state spending in a way that solves our long-term structural fiscal problems. We still have too many state employees, adjusted for population, compared to other southern states. 22% of our managers manage one employee. Last year taxpayers paid for 900,000 visits to expensive emergency rooms for routine care. We have too many colleges offering the same programs and way more consulting contracts than we need.

Until we address these shortcomings, Louisiana state government will continue to lurch along, living paycheck to paycheck and budget crisis to budget crisis.