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Out of office, Jindal looms over Louisiana budget crisis

1 year 4 months 2 weeks ago Monday, March 07 2016 Mar 7, 2016 March 07, 2016 10:02 AM March 07, 2016 in News
Source: Associated Press
By: Melinda Deslatte

BATON ROUGE, La.- Bobby Jindal left the governor's office nearly two months ago, but his legacy permeates a special legislative session aimed at digging Louisiana out of deep financial troubles.
    
Louisiana's worst budget crisis in nearly 30 years is threatening public colleges with cuts that could shutter campuses mid-semester and putting health care services for the poor and disabled at risk of elimination.
    
State leaders blame the Republican former governor for creating - and hiding - many of those woes.
    
Jindal, burnishing his fiscal conservative credentials for his failed presidential campaign, refused to hike taxes or approve any action that even resembled a tax hike, including trimming expensive business tax credits, even amid an economic downturn. So, TV's bearded men of "Duck Dynasty" got millions in film tax credit subsidies, while tuition skyrocketed for college students at campuses struggling with deep state financing cuts.
    
Criticism of Jindal is bipartisan and widespread, with irritated lawmakers left sifting through the highly-unpopular choices of raising taxes or taking a hatchet to higher education and government services. They're considering enacting tax bills Jindal vetoed and stripping a fake tax credit created to protect Jindal's anti-tax record.
    
Legislators are hearing that cuts described by the Jindal administration as "efficiencies" actually went much deeper, striking at services. They've learned about borrowing practices that increased state debts and about threats to Louisiana's cash flow because it spent down reserves.
    
"We've been living in a fictional world for the last eight years," said Jay Dardenne, a Republican who served as lieutenant governor under Jindal and is now chief financial adviser to Gov. John Bel Edwards, a Democrat who inherited the problems.
    
Edwards called the special session to try to stabilize Louisiana's budget. He also suggested he is revealing the true depth of the problems Jindal hid.
    
"It's time for fiscal responsibility in this state. No more smoke and mirrors," Edwards said.
    
The state has to close an estimated $900 million shortfall in its $25 billion budget by June 30, a gap that shrank as Edwards and lawmakers slashed spending and tapped into patchwork financing. Next year's shortfall tops $2 billion.
    
Negotiations continue between Edwards and the majority Republican legislature over tax hikes to fill the gaps. But there's little disagreement about the problems' origins.
    
Guarding his anti-tax record, Jindal balanced the budget with short-term fixes: selling state property and raiding savings accounts. As the assets disappeared or promised savings didn't pan out, budget gaps appeared. The oil price slump worsened the problems.
    
"The previous administration focused more on spending money that didn't exist, which is why we're in the situation we're in now," said House Appropriations Chairman Cameron Henry, a Republican.
    
Jindal and his former chief political adviser did not return calls for comment. But before he exited office, Jindal defended his financial management, saying he chose to grow the private sector rather than the government. He wanted even deeper cuts but faced legislative resistance, he said.
    
"I think the approach we took was absolutely right," Jindal said in December. "We held the line on taxes. We were willing to cut government."
    
Lawmakers went along at the time, rather than buck Jindal in a state with a powerful governor who can retaliate by eliminating local construction projects and strip items from the budget with a line-item veto. No lawmakers defend Jindal now that he's gone, and some who acquiesced to the budgeting tactics now acknowledge their own culpability.
    
"We may have offered some critiques and some criticisms, but we went along with it anyway," said Senate Finance Chairman Eric LaFleur, a Democrat.
    
The budget instability prompted one national credit rating agency to downgrade Louisiana last month. State officials worry more blows could follow.
    
"You can't spend more taxpayer money than you take in for seven years in a row and not expect a downgrade to your credit rating," said Treasurer John Kennedy, a Republican.
    
Other expenses are surfacing.
    
Costs skyrocketed for outside attorneys Jindal used to defend his policies rather than government lawyers. A recent audit said Jindal's borrowing maneuvers to generate quick cash will cost Louisiana as much as $231 million over decades. Outsourcing programs that helped cut state payroll - a point Jindal touted in his campaign - have created problems.
    
"Privatization does not save us money. In some cases, it costs us money," Henry said.
    
With Jindal gone, lawmakers have started chipping away at his policies. The first bill to gain House passage was aimed squarely at him.
    
The measure, awaiting Senate approval, would scrap a much-maligned tax credit Jindal pushed ahead of his White House bid to comply with a no-tax pledge he made to anti-tax activist Grover Norquist's organization.
    
The complex credit didn't raise money or cut taxes. It just gave Jindal cover to say he kept his pledge. Lawmakers grudgingly passed it rather than risk steep cuts to colleges.
    
During the debate, the repeal's sponsor, Republican Rep. Chris Broadwater, was facetiously asked if Norquist had approved the new measure.
    
Broadwater pulled out a puppet of Grover, the Muppet, and replied to laughs and applause: "Grover has made an appearance and is OK with the repeal."
    
He shoved it into a paper bag when the repeal passed.

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