SADOW: Senate Grows Government To Overcome Dissident Intransigence

Somewhat predictably, the Louisiana Senate threw back to the House of Representatives an operating budget designed to bludgeon the political clout of both the minority party Democrats and a faction of the majority party Republicans by making offers that can’t be refused nor can be resisted. Meanwhile, the fiscal system that produces this chaos remains the same and grows government.

The version of HB 1 that came from the House represented a significant departure from the version initially introduced by Gov. Bobby Jindal. Most dramatically, it removed large swaths of some kinds of “one-time money,” such as transfers of surplus money from dedicated funds and borrowing from dedicated funds of state-authorized entities, and replaced it with another kind, a tax amnesty program. It also made some minor across-the-board spending cuts, eliminated a small amount of wasteful tax credits, and hiked taxes somewhat on retailers by eliminating the state provision to pay for them acting as sales tax collectors for the state in a timely fashion.

It also came weighed down by a series of measures that the GOP faction, self-styled as “budget hawks” because they talk loudly about budget reform without ever actually addressing satisfactorily the issue for the most part, stumped to institute budget process reform at the margins. With one exception, these would be innocuous to helpful in defining the process.

What came back from the Senate had some substantial differences. It restored over half of the one-time money in order to reduce many cuts, to fund public school teacher and some staff pay raises, to make available additional Medicaid waiver slots to address the huge backlog for service provision, and to pump more into higher education. It also did have additional money to play around with, courtesy of better-than-expected state revenue forecasts recently certified, which proved helpful to pay for school scholarship vouchers that released (by court order) more money for public schools and for higher-than-anticipated transition costs for moving the state out of its archaic and wasteful model of operating public hospitals.

It also took the opportunity, in conjunction with other bills, to decouple the presumed reform measures from the budget, setting up conflict with the “hawks” on that issue and on the use of one-time money they refuse to sanction as legitimate. Almost all of the group are House members and Republicans, meaning of this kind they comprise about 30 in number or at most a little more than half of the GOP delegation (their website lists 19 of this kind, but several more have lent their names to legislation and/or voted with the 19 admitted on measures identified with the group). Add a Democrat and no-party member identified with the group and they come close to a third of the House membership.

The only reason the House version came as it did was a product of the strange bedfellow alliance between the “hawks,” as that budget let them continue their jihad against one-time money to make with the inserted process changes their reform posturing more credible, and Democrats, who this way get the minor tax increase, at least some influence where otherwise they have none, a chance to weaken the GOP by exploiting the rift, and get a chance to poke Jindal in the eye (who propounds the idea of sweeping idle funds gathered in a predictable and recurring matter for operating expenses). But the Senate budget version drives a wedge between the two with the spending sweeteners.

In recent years, Democrats have taken to braying long and loudly about underfunding of education and social services. Yet now the Senate version hands them $2 million more permanently on New Opportunities Waiver slots, tens of millions of more this next year in higher education, $50 million in a bonus for public education salaries, and generally bigger government. So they are going to vote against (and also contrary to all of their Senate colleagues except for the most partisan, ideologically-driven, race-baiting, and bitter of them all) getting these things they have thrown hissy fits over and bigger government as a whole?

Not that all of this added stuff is necessary, even for attracting their votes. The waiver slots are relatively inexpensive although a permanent commitment and needed to reduce a backlog that might get the state in legal trouble if not addressed. The jury is out on whether higher education is committed enough to continuing progress of moving towards a more efficient and effective system, but that extra money may be justified on that basis. Least needed is the salary bonus, given the relative gravy train of compensation enjoyed by teachers (who make on average in base salary in the state make several thousand dollars more annually that median family income and nationally make about one-and-a-half times what private school teachers make – and this doesn’t include the very generous benefits) and that other state employees aren’t getting the same. Even so, it could be justified if linked to educational reforms, resisted by a number of teacher unions, by arguing the bonus compensates for the additional work being put in during the transition process.

However, this budget also might rent dissension within the “hawks.” In the House, there exists a “hawk”-inspired rule that states under the present conditions that a two-thirds majority must be secured to approve of the use of one-time money going to recurring purposes above a certain level, which pegs the total at about $188 million this year. The Senate version proposes $272 million of one-time money, but it’s unclear if more than two-thirds of that total is for recurring things. If not, a simple majority in the House passes the budget. If so, then the “hawks” would have to achieve essentially unanimity to even have a chance to block it, without Democrat allies.

Yet given that vetoing it at this late date basically forces an immediate special session and that Jindal still can cast vetoes on items that deviate more than trivially from the Senate plan (his office already having signaled assent to it), and with all of the incentives attached, Democrats would seem to have little enthusiasm for opposing the product because this likely is the best they can get in taking advantage of the internecine GOP struggle. If so, this gives the “hawks” the green light to kvetch about the budget and its decoupling from their legislative devices (which have become reduced to pilot programs in statute) yet actually avoid failure and all its implications and inconveniences in having one on time.

And perhaps this is the outcome everybody wants: the one-time money goes through with “hawks” opposed, and then this is repeated on the entire package with perhaps a few more defectors from each party (only a majority of the seated membership being needed to pass). The budget is solved for another year and the “hawks” get to “prove” they are reformists by voting against the budget without actually having to propose and execute responsible and effective reforms, giving themselves another year to talk a good game in front of their constituents and the media.

Ironically, of course, if the “hawks” are against bigger government, their very actions produced it. Had they not issued their fatwa against one-time money, the unholy alliance never would have been made, and therefore the inducements of more government spending to break it never needed to happen. Again, Democrats should be thrilled by getting this something for nothing even as they also tend to their public images by carping and moaning about the end result.

Thus the sausage gets made, producing something even less stable than Jindal initially proposed because of the uncertainty surrounding the chunk of money from the tax amnesty. The “hawks” may well claim that any such shortfalls caused by this are because of all other forms of one-time money that they opposed, Democrats will bleat it’s because tax increases are needed even after the small one they got, and if this comes about the hypocrisy merely will continue while true budget reform that dramatically reduces dedications and generates revenues only on the basis of genuine needs, and the government restructuring that entails, never gets addressed.



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