Necessity has been the mother of invention in state finances for a long time, but the high-handed actions of Gov. Bobby Jindal in shuffling money around have set new records.
If patents were issued for getting around the Louisiana Constitution and rules and precedent, Jindal’s commissioners of administration would have a sheaf worthy of Thomas Edison.
Unfortunately, at least for the administration, the courts are beginning to join the growing chorus of legislators and government reformers worried that the ramshackle structure of state finance is about to fall down.
On Tuesday, a state judge ruled that the administration and the Legislature should not have balanced the state operating budget by grabbing dollars from a retirement fund for probation and parole officers.
The administration will appeal to higher courts, of course.
What is in no doubt is that the moral standing of the governor’s budget practices has been shredded: Vast amounts of one-time money, short-term expedients and interfund borrowing on a vast scale have resulted in annual budgets that are balanced precariously.
If that. If by “balanced” one means budgets that year in and year out have the reliable and regular financing that governments ought to have, Jindal has produced only one balanced budget, that of his first year. Ever since, the kinds of fund borrowing that District Judge William Morvant of Baton Rouge struck down have been regular features of the budget.
At issue in Morvant’s ruling is what is known in state government as a fund sweep.
The funds exist because legislators set them up years ago. An example would be allowing farmers to collect dollars for eradicating pests that threaten crops. The collections add up, generating millions of dollars that are appealing when the state lacks sufficient money to pay for health care, education and other public expenses.
The sweeps take money from them to fill gaps in the general budget, which pays for state workers and services. Jindal has portrayed himself as a reformer, but the budget sweeps are the easy way around budget problems.
The Louisiana Probation and Parole Officers Association sued after $3.7 million was swept last year from a fund that takes a portion of probation and parole fees to enhance retirement benefits for the officers who supervised offenders.
Taxes and fees are different animals under the constitution: The association maintained that the fees paid into the fund were used as state revenue as if from a tax, making the conversion unconstitutional.
“The citizens of Louisiana should not be misled into believing that fees paid into a certain fund are for a dedicated and specific purpose when in fact those statutorily dedicated fees are being converted into general fund revenue dollars,” adds the suit, which was filed against the Legislature.
The administration’s argument for fund sweeps is a circular one: We need the money for higher education and health care. What is not admitted is that Jindal, with the acquiescence of lawmakers, cut state revenues to fund tax cuts for favored interests. If there is a crisis justifying the sweeps, then, it is created by the governor and Legislature.
What happens when it turns out the easy remedy of fund sweeps is unconstitutional?
When a ruling like Morvant’s comes along, the house of cards of state financing is called into question. But it is only a symptom of a larger problem.