Senate panel clears bill to make it easier to tap 'rainy-day fund'

Baton Rouge Advocate ^ | 17 November 2005 | MICHELLE MILLHOLLON

[LSUfan]

Lawmakers hit on a new way Wednesday to squeeze more money from the state's "rainy-day fund."

The Senate Committee on Finance approved a bill to change the ceiling on the "rainy-day fund" through an accounting tactic. SB105 now goes to the full Senate.

The change would give legislators an additional $194 million to spend.

The question is how lawmakers would use that cash.

The bill's author, Senate President Don Hines, would not rule out the possibility that the money could be used to put back in the state budget some of the legislators' pet projects.

The Blanco administration cut those and other items in a calculated move to show the federal government the state is trying to bail itself out of the financial calamity caused by hurricanes Katrina and Rita.

Her goal is to garner as many federal dollars as possible for post-storm rebuilding.

The House slashed $606 million in state spending Wednesday to address the nearly $1 billion shortfall in tax revenue caused by the storms.

Officials also face a $3.7 billion bill from the federal government for the state's share of the hurricane recovery costs.

Despite the financial problems, many lawmakers are complaining about cuts to their local projects. A handful of legislators tried to restore such funding in the House. The attempt failed.

Commissioner of Administration Jerry Luke LeBlanc told the Finance Committee on Wednesday that the cuts show the state isn't solely relying on the federal government for a solution to the financial crisis.

"We hope to send the clear message that Louisiana is going to take care of its fiscal problems," he said.

LeBlanc, the governor's chief administrator, said that, if extra money becomes available, he doesn't want to restore legislators' projects with it.

"We're adamantly opposed to restoration of those issues," LeBlanc said.

Hines said he wants to put back money the governor cut from health care and education, the two areas that bore the brunt of the budget ax.

"I think we're going to act responsibly," he said.

Sen. Hines said he's not interested in using the money to pay part of the state's disaster bill owed to the federal government.

"Let Iraq pay theirs and we'll pay ours," he said, referring to the cost of the Middle East military conflict.

The legislation sparked little conversation among committee members. No one asked how the money would be used.

John LeBlanc with the Louisiana Association and Industry argued against withdrawing more money.

The business lobbyist pointed out that the state lost a third of its revenue when the hurricanes hit.

"I want to keep as stable a fund as possible for when the bumps occur," LeBlanc said.

Hines said his bill still would leave $488 million in the fund.

The "rainy-day fund" is the common term for a savings account built up over the years from excess state revenue. Rules in the state constitution govern when and how much of the fund can be used for emergencies.

Lawmakers already had planned to spend one-third of the $463 million fund under those rules.

Ordinarily, withdrawing more than a third of the fund requires a vote of the people. However, the Blanco administration devised a way around that.

The administration wants to deposit the entire $250 million surplus from last fiscal year into the "rainy-day fund." The constitution limits how much money can be placed in the fund, preventing it from becoming an endless stash of funds.

The $250 million deposit would overfill the "rainy-day fund," spilling $188 million into the general fund, where legislators can spend it without a vote of the people.

Hines' bill would go further than that.

Deposits into the "rainy-day fund" are based on a percentage of the state's total revenue receipts. However, state law doesn't spell out which revenue sources are to be included in calculating the receipts.

State government is funded through tax collections, fees, licenses, college tuition, royalties and federal money.

Hines' bill would exclude federal funds, college tuition and other revenue sources from the calculation, lowering the cap on the "rainy-day fund."

[LSUfan]

I post this where I posted it solely to bring attention to this offensive and irresponsible statement by the liberal Democrat state senate president, Don Hines:

"Let Iraq pay theirs and we'll pay ours," he said, referring to the cost of the Middle East military conflict.

I want everyone to know the good the bad and the ugly of politics down here. The bad and the ugly are the charlatans like Hines. The good news is that 3 state legislators have switched to the GOP in the past 2 weeks and the state treasurer and former two-term state attorney general are close to doing so as well. And Governor Blankstare, aka Edith Bunker, has an approval rating in the 30s, meaning that we have a solid shot and throwing bums like Hines out on their butts.

Not everyone in Louisiana buys into this crap.

I thought the Freepers might appreciate Senator Hines' email addy as well:

hinesd@legis.state.la.us

[CajunConservative]

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