When the House Appropriations Committee approved a $25 billion budget Monday, it seemed to end the practice favored by Gov. Bobby Jindal and senior legislators of using money available for just one year to pay for expenses that have to be met annually.
The committee stripped $51 million of one-time money out of Jindal’s proposed budget, which takes effect July 1.
The committee’s action reflected the influence of the mostly Republican lawmakers known as the Fiscal Hawks. They have argued for years that using one-time money is a gimmick that inevitably throws the state budget out of balance as one-time money fails to materialize as expected. The imbalance, they have also argued, produces shortfalls that lead to mid-year budget cuts under Jindal, which have wrought havoc on the state’s colleges and universities and the state hospital system that serves the working poor.
“There are still big holes in the budget. We’re going to be in trouble.”— state Rep. Jim Morris, R-Oil City
So does Monday’s action mean that the Fiscal Hawks are flying high again, a year after they finally forced Jindal and legislative leaders to bend their way on the state budget?
Perhaps not. It turns out that there is one-time money, and then there is one-time money.
The $51 million eliminated Monday was determined under a legal definition approved by the Legislature last year at the Fiscal Hawks’ behest.
But the budget advanced by the Appropriations Committee to the full House also contains at least $800 million for which no revenue source exists the following year – meaning the $800 million also could be called one-time money.
“There are still big holes in the budget,” state Rep. Jim Morris, R-Oil City, a leading Fiscal Hawk, said in an interview Monday afternoon. “We’re going to be in trouble.”
The House will take up the budget Monday. Once passed, the budget goes to the Senate Finance Committee and then the full Senate. Senators have not shared the Fiscal Hawks’ qualms about one-time money, saying their constituents do not express that concern.
Sources of one-time money for the state include the sale of a government building, a legal settlement, a tax-amnesty program or the transfer of excess funds from a state entity, such as Jindal tried to do this year by taking $50 million from the Ernest N. Morial Convention Center’s reserve fund. The Appropriations Committee nixed that on Monday.
Budget experts don’t worry about lawmakers occasionally using one-time money for ongoing expenses. But they say that Jindal, who leaves office in January 2016, has made it a regular practice, making it more and more difficult to paper over the state budget’s problems.
“At some point, we’ve got to come to grips with having a sustainable budget,” said Jim Richardson, an economist at Louisiana State University who sits on a state panel that determines the amount of money available for the state to spend. “It will be a big challenge next year for this governor and the following year for the next governor.”
The question of how much one-time money is in the budget now before the House has proven confusing to lawmakers in recent days, in part because the Hawks have lain low this session. They have held no organized meetings, unlike last year when they met regularly before and during the legislative session.
Fiscal Hawks won notice and some battles last year
After several years of minimal success, the Fiscal Hawks achieved notable success last year. Although the House Appropriations Committee advanced its budget to the floor in 2013 with $525 million in one-time money, the Fiscal Hawks completely removed it on the House floor after forming an unlikely alliance with Democrats.
The Senate added back tens of millions of one-time money, but the Fiscal Hawks and Democrats in the House had a working majority in that chamber, which forced Jindal and the Senate to accept a final budget that contained only $80 million.
The Fiscal Hawks also pushed through a measure that created a mechanism to limit one-time money. Act 419 does not allow the Legislature to spend money on recurring expenses unless the Revenue Estimating Conference, a four-member panel that meets several times a year to certify the state’s available revenues, rules that the money is indeed a recurring source of income. Richardson sits on the conference.
At its January meeting, the panel applied Act 419 to report that an influx of revenue to the state was actually one-time money. Based on that ruling, a separate entity known as the Legislative Fiscal Office determined that Jindal’s proposed budget that went before the Appropriations Committee contained the $51 million in one-time money.
By one measure, the $51 million figure marked another success for the Fiscal Hawks. The governor’s original 2013 budget had $391 million in one-time money, according to the Legislative Fiscal Office. In 2012, it was $267 million. 2011: $449 million.
Another measure of success: The lawmaker who sponsored the amendment to eliminate the $51 million during Monday’s Appropriations Committee hearing was the chairman, state Rep. Jim Fannin, R-Jonesboro. Last year, Fannin repeatedly resisted taking one-time money out of the budget.
“My position is to not spend more than you take in,” Fannin said in an interview. “We have done that throughout the years. I’ve had to do that with past bills because that’s what the majority has wanted. It’s not what I wanted.”
Despite some victories, the Fiscal Hawks still face a major challenge this year.
In an April 7 analysis, the House Fiscal Division found that the budget before the Appropriations Committee contained $940 million “in revenues that will have to be replaced in the [the following year’s] budget to fund the same level of expenditures.” That’s legislative-speak for saying it’s one-time money.
Monday’s committee actions reduced the $940 million to perhaps $800 million, although it could actually be as high as $1 billion, some legislators believe.
“It’s still a very big problem,” state Rep. Brett Geymann, R-Lake Charles, the Fiscal Hawks’ leader, said in an interview. “Are we going to address a portion of it this year so it will be more manageable next year, or will we roll all of it over?”
Effort losing some support and momentum
Geymann said the Fiscal Hawks have no plans to meet before the House takes up the budget on Monday. He said he has been preoccupied this year with trying to derail Common Core, the education standards that Louisiana is adopting along with more than 40 other states. So have two other Fiscal Hawk leaders: state Rep. Cameron Henry, R-Metairie, and state Rep. John Schroder, R-Covington.
The Fiscal Hawks appear to be weaker politically. They had 30 to 40 members last year. Several members are believed to have left the group after Fiscal Hawk leaders tried to eliminate some tax breaks for business last year as a way to balance the budget.
One key question is whether the Fiscal Hawks will band together again with the Democrats to regain their working majority in the 105-member House. In doing so last year, the Fiscal Hawks got the Democrats to stand against one-time money. In exchange, the Democrats were able to insert $69 million more for K-12 education in the budget and at least $20 million more for higher education.
“It’s possible to come together,” said state Rep. Katrina Jackson, D-Monroe, who leads the Legislative Black Caucus. “I talk to the Hawks every week. This body has learned to keep an open communication on the budget.”
But some Fiscal Hawks – especially Schroder and state Rep. Lance Harris, R-Alexandria, who also heads the Republican House Caucus – suffered a backlash for working with Democrats.
“I know a lot of them got pushback from the Republican hierarchy last year,” said state Rep. John Bel Edwards, D-Amite, who heads the House Democratic Caucus. “Lance Harris said he’d never sit down and work with the Democrats again. That was a harsh statement coming after a session where we worked on common goals.”
Harris and Schroder declined to be interviewed.