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|Why Jindal's budget will prevail|
All of the horse jockeying about budget cuts and efforts to generate revenues in light of a $1.6 billion revenue shortfall that the state faces heading into the 2011-2012 fiscal year is simply that -- it's jockeying on behalf of state legislators, bureaucrats and the governor.
They're doing it to make their case for the proper course of action the state should take to balance its books in the new fiscal year.
Though the Legislature approved a roughly $26 billion budget for the current fiscal year, which ends June, 30, 2011, only $7 billion -- give or take a few hundred million -- involved general fund revenues. The remaining $19 billion concerned constitutionally dedicated expenditures and monies the federal government gave Louisiana to provide services for its citizens. In other words, hands off the $19 billion because it's untouchable.
It's that $7 billion general fund budget -- give or take a few hundred million -- that's staring at a $1.6 billion shortfall headed toward the 2011-2012 fiscal year. To surmise, when the time arrives for Gov. Bobby Jindal to present his proposed budget for the new fiscal year to the Legislature for consideration, the governor will have either cut $1.6 billion from the roughly $7 billion general fund budget or he will have used a combination of budget cuts and other revenue enhancers to make the $1.6 billion shortfall disappear.
Remember, the state Constitution requires a governor to present a balanced budget to the Legislature. The Constitution also requires that the Legislature approve a balanced budget for any fiscal year. No ifs, ands or buts.
Jindal has given lawmakers, the heads of state agencies and higher education officials a broad and somewhat vague plan on how he intends to deal with the $1.6 billion shortfall. The governor could do a better job in explaining how he's going to handle the financial meltdown, but in all honesty, it really doesn't matter at this time. What matters is the actual budget for the new fiscal year that Jindal will present to lawmakers after the first of the year.
Look for Jindal to use some one-time revenues and monies realized from privatizing certain state functions to come up with roughly $700 million-$800 million to help erase the $1.6 billion shortfall. The remainder of the shortfall -- $800 million-$900 million -- will go away courtesy of budget cuts proposed by the governor.
The Legislature will baulk at Jindal's proposed budget, especially cuts in funding for services in individual legislative districts. Left-leaning members of the Legislature will push for an increase in taxes to offset the cuts. Conservatives will gripe about Jindal proposing the use of one-time revenues for recurring expenses. The hue and cry will be heard for miles and miles.
At the end of the day, or at the end of the 2011 regular legislative session, the governor's proposed budget will prevail. It always does. 2011 will be no different.
Jindal's proposed budget for the new fiscal year will be enacted – by and large – because very few members of the Legislature will be willing to go on record in favor of raising taxes in an election year. After all, raising taxes is the only alternative for the Legislature to pursue to balance the budget if it can't live with Jindal's plan to balance the new fiscal year budget.
Considering the political climate that exists in Louisiana and elsewhere across the country, a tax increase is out of the question. As it should be in a recession and if and until government at all levels learns to live within its means.