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Measure to free up hundreds of millions of dollars in state spending clears first hurdle

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Sen. Sharon Hewitt, R-Slidell, co-chaired a subcommittee that proposed freeing up dedicated funds to provide more budget flexibility. (Sarah Gamard/LSU Manship School News Service)
By Drew White, LSU Manship School News Service

BATON ROUGE — A measure that could free up several hundred million dollars in state spending that is set by law and cannot be adjusted in the annual budget progress narrowly cleared its first hurdle Monday.

In a 6-4 vote, the Senate Finance committee approved a slightly watered-down version of a bill that would reclassify the funds in the Treasury. It now heads to the full Senate for consideration.

Several of the targeted programs were able to retain their dedications through amendments by committee members. It was not immediately clear how much that would reduce the total amount of money being freed up.

Sen. Sharon Hewitt, R-Slidell, has said that the goal was to free up $800 million over two years of the $4.2 billion dedicated to specific funds in the state budget.

“We are an outlier compared to all other states in number of funds and amount of funds dedicated,” Hewitt said. “It does not give you the opportunity to look at the big picture,” she added, “and choose to make a particular entity a higher or lower priority.”

Louisiana has about 400 statutory dedications funding specific programs that range from recreation and conservation districts to the purchase of firefighting gear for sugarcane farmers.

Hewitt gave an example of the tobacco tax match fund, where $119 million come from tobacco taxes to fund Medicaid. The bill would require the tobacco tax dollars to go straight to the state general fund, where the state would then provide Medicaid funding.

The bill would require many of the funds to become part of the state’s general fund, providing more budget flexibility to the state.

Hewitt intends to eliminate dedicated funding for some organizations and projects to keep budget cuts from falling disproportionately on higher education and medical care for the needy. The bill is based upon recommendations from a joint, bipartisan legislative subcommittee.

“If we don’t do it now, I don’t think we will ever do it,” Hewitt said to her fellow committee members.

“The problem with our current system is we are creating the have and the have-nots,” she added. “We can try and level the playing field by making decisions for the current year.”

The bill would also remove dedications that finance agencies’ core operations and require them to compete for money through the normal budget process.

Sen. Gregory Tarver, D-Shreveport, cautioned that departments could use money for other purposes.

Rep. Rick Edmonds, R-Baton Rouge, responded that he hoped the state has the right agencies that make the correct choices. “I expect them to do their job,” he said.

“I expected the House to do their job too, but they did not do it,” Tarver said in a testy exchange referring to a much-criticized budget that the House passed last week.

Hewitt’s bill would also re-classify fees, like the firefighting assessments on the sugarcane growers, as self-generated revenue instead of dedicated funds.

“We’re trying to get funding to where if it looks like a duck, it’s called a duck,” Hewitt said. “If it looks like fees and self-generated revenue, it should be classified as such.”

Committee members unanimously approved an amendment for the Louisiana Agriculture Finance Authority to retain its allocated funds after Mike Strain, Commissioner of the Department of Agriculture, testified.

Sen. Hewitt expressed her frustration. “This is how we got to the current situation with 400 dedicated funds in the first place,” she said. “If entities are worthy of being funded, they will be funded, and we should have the flexibility of being able to decide which ones on a year-by-year basis.”

Also excluded from the measure were the Specialized Educational Institutions Support Fund, which finances health, agriculture, and research centers at LSU and Southern University; the Pesticide Fund Account; and a Crescent City amnesty program.