Talk Moves To Spending Surplus

Jeremy Alford Friday, November 21, 2014 0
Talk Moves To Spending Surplus

While the Division of Administration, Treasurer John Kennedy and the legislative auditor spar over the validity of a $178.5 million surplus, and how it was calculated, some officials expect the money to be up for grabs sooner or later.

Others aren’t so sure. Kennedy, for one, argues that the budgeting practice has never been used before and the state doesn’t have the surplus to spend.

The legislative auditor’s office is working on its own report on the surplus money. It will address the question of whether the money should be spent. But the findings won’t be made available until the end of the year.

Meanwhile, the number crunchers in the Legislative Fiscal Office have offered mixed reviews, with one saying the money should be included in this year’s budget report and another cautioning against spending the money.

The Revenue Estimating Conference (REC), which is charged with determining how much money the state can spend, will have its say in January.

Commissioner of Administration Kristy Nichols told LaPolitics she expects the REC to recognize the surplus as non-recurring, which means the money will be limited to construction projects, debt payments, coastal restoration or the rainy day fund.

Nichols said her top priorities are health care and education. How the use of money for those categories would come about is unknown.

In the past, the administration has used non-recurring money to plug budget holes by filtering it through acceptable routes. Such example, the administration deposited funds into a coastal fund and then pulled them back out to spend as needed.

Some lawmakers, such as Rep. Kenny Havard, R-Jackson, are already pushing the administration to use the supposed surplus to mitigate the effects of health plan increases for state workers under the Office of Group Benefits. “It is questionable whether there is actually a surplus. But should it be determined that there actually is $178.5 million, it should go toward the manufactured crisis created by this administration,” Havard said.

In response, Nichols told LaPolitics, “We are going to work with the Legislature on it. If this is something they want to work on, we will work with them.”

Another question in regard to the practice of using unused self-generated money and supposedly overlooked interagency transfers — the source of the new surplus — is whether the administration will try to estimate how much of that cash will be left behind at the end of the current fiscal year; and, more to the point, whether it will try to plug it into the next budget.

“I think it’ll benefit the 2016 budget,” Nichols said.

 

Industry Digs In On Coastal Suit

There have been two big developments in the lawsuit filed against 97 oil and gas companies by the Southeast Louisiana Flood Protection Authority-East.

First, Gov. Bobby Jindal’s efforts to restock the board have failed. Opponents of the suit for reparations for coastal damages were hoping to get a friendly enough membership to squash the legal action.

In addition, District Court Judge Janice Clark has ruled that legislation passed during this year’s session to do the same doesn’t apply to the flood protection authority.

The energy industry, however, doesn’t sound discouraged.

Gifford Briggs, vice president of the Louisiana Oil and Gas Association, insisted that a settlement isn’t on the table and a consent decree in exchange for a new processing fee is highly unlikely.

“The path forward doesn’t change at all,” said Briggs. “We’re going to appeal that ruling, on the basis that [Judge Clark] had no right to make that decision. She’s overseeing a completely different case. We’ll have a ruling from either the Supreme Court or federal court, where the coastal suit is. This is going to be a very long legal battle and this is just the beginning. This could all take several years to figure out.”

With such an extended timeframe, Briggs said, the strategy of reshaping the flood protection authority’s board will always remain viable. “That will continue.”

 

Scalise Builds Whip Team

Roughly four months after being selected as whip, the third most powerful position in the lower chamber, Steve Scalise is having to gear up to seek re-election for the leadership post.

“I’ve started reaching out to my colleagues,” he told LaPolitics. “I’ve already started asking for their support again and I think we have a broader team this time around.”

Opposition on the Hill has not yet surfaced, he added.

While opportunities to whip important votes have been rare during his brief tenure, Scalise has curried favor by overseeing the remodeling of the cloak room in the old House chamber, where Abraham Lincoln met with friends and talked around a fireplace when he was a member more than 100 years ago. Scalise reopened the lounge area to members about a month ago.

“We got everyone together for jambalaya, gumbo and boudin,” he said.

Back home, Scalise’s campaign initiated a six-figure media buy for his congressional re-election campaign, despite the fact that he did not face serious opposition.

Scalise was able to run for whip during the ongoing term because former House Majority Leader Eric Cantor of Virginia unexpectedly lost his re-election bid this summer and resigned from his post, setting up the leadership swap. Pundits contend one of the reasons Cantor was booted out by voters was because he lost touch with his home district and focused on the District of Columbia.

 

For more Louisiana political news, visit www.LaPolitics.com or follow Jeremy Alford on Twitter @LaPoliticsNow.