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Story Archives: Where's the guinea pig?
|Where's the guinea pig?|
Later this week Gov. Bobby Jindal will unveil a $24.9-billion proposed budget for the 20011-2012 fiscal year, which begins July 1.
The proposed spending plan for the new fiscal year is more than $1 billion less than the budget the Legislature adopted last year for the 2010-2011 fiscal year, or the current fiscal year. Jindal originally proposed a roughly $24-billion budget for the current fiscal year, but lawmakers took it upon themselves to spend more money than the state could truly afford to appropriate. Accordingly, that's one of the reasons we've been hearing a hue and cry of late over a so-called $1.6-billion deficit the state supposedly faces heading into the new fiscal year. Supposedly.
In piecing together a balanced budget for the Legislature to entertain in the regular legislative session this spring, the Jindal administration banked on utilizing some $475 million in one-time revenues. Roughly $50 million-$75 million of those one-time monies would pay for one-time expenses. The remaining $400 million-$425 million in one-time revenues would be used for recurring appropriations.
Last year, the Legislature relied upon some $1.6 billion in one-time revenues to balance the budget. The lion's share of those one-time revenues was federal stimulus dollars, which won't be available for the new fiscal year. The year before last, lawmakers turned to roughly $800 million in one-time revenues to make ends meet.
To surmise, it's not uncommon for the Legislature to rely upon one-time revenues to balance a budget. It's not sound fiscal policy, but nonetheless, it's not uncommon.
Meanwhile, Jindal's proposed budget for the new fiscal year calls for roughly $1 billion in spending cuts compared to the current fiscal year budget. Though it has been widely assumed health care and higher education would bear the brunt of cuts in spending in the new fiscal year, one administration official says the proposed budget Jindal will roll out Friday is relatively kind to health care and higher ed. Budget-wise, that is.
"Health care and higher education should be pleased with our budget," said Timmy Teepell, who serves as Jindal's chief of staff.
Teepell didn't go into much detail about the $1 billion in cuts in spending for the new fiscal year, but suffice it to say, we'll hear plenty of bellyaching from the affected parties once it becomes known whose or which budget, or budgets, will receive less money than anticipated in the new fiscal year.
With that backdrop in mind, it is worth noting that what is described as a budget cut in government circles often differs greatly than what we in the private sector describe as cutting our expenses, or tightening our belts. A standstill budget, or one that reflects no increase in funding to account for inflation, literally represents the end of the world for our friends and neighbors who work in government. To put it plainly, government bureaucrats and their bosses are prone to view a standstill budget as one that was cut because it did not reflect an automatic increase in funding to offset inflationary expenses, which are literally nonexistent these days.
On the other hand, those of us who slug it out in the private sector don't have the luxury of relying upon someone else to generate more revenues so we can spend more money. Instead, if we desire to spend more money in a particular year, we must generate additional revenues to make it happen.
That's the way it works in the real world.
State lawmakers who may be contemplating offering legislation in the regular legislative session to increase taxes to offset Jindal's proposed $1 billion in spending cuts would be wise to pay close attention to how the real world works. At the very least, tax-happy lawmakers should remember that 2011 is an election year, and the electorate, by and large, isn't in a tax-happy mood.
Yet, they're welcome to trot out a tax increase or two, but lawmakers who believe raising taxes is the proper action to take to prop up state spending in the new fiscal year should prepare for the blowback. Besides the general public, look for the Jindal administration to pounce and pounce quickly on any measure that advocates raising taxes.
Something tells me that's exactly what Jindal wants – a proverbial guinea pig whose willing to risk his or her political career by offering legislation to increase taxes to satisfy some self-centered constituency. If that occurs, Jindal will have been handed another issue to campaign on when he seeks re-election in the fall, assuming a guinea pig surfaces to challenge him.