William Short
October 12, 2010
Trial in Gulf oil spill cases postponed
October 14, 2010The Jindal administration asked agencies last week to begin prepping for another possible round of midyear budget cuts, totaling nearly $200 million, in case the state loses a lawsuit over its use of the “rainy day” fund to balance last year’s budget.
Commissioner of Administration Paul Rainwater, the governor’s top budget adviser, said he’ll give every agency a target figure for cuts within the next week, but he started calling cabinet secretaries and officials to get them thinking about where they might cut.
“Hopefully we win the case. Hope is not a plan though,” Rainwater said. He added, “If we lose this case, we’d have to have pretty immediate cuts.”
A lawsuit filed a day earlier claims legislators violated the state constitution by not refilling the rainy day fund after using it to help close a deficit in the last fiscal year that ended June 30. The lawsuit, filed by a former state lawmaker in Baton Rouge court, seeks a $200 million repayment to the fund.
The House and Senate haggled over the repayment issue when crafting budget plans in the last legislative session.
Senate leaders won the dispute, arguing that a 2009 statutory change doesn’t require the rainy day money to be repaid for years, despite a constitutional provision that mandated the fund be refilled. Gov. Bobby Jindal and a majority of House members agreed to the Senate budget plans that didn’t require repayment.
If the judge rules the money must be repaid, it would create an estimated $200 million hole in the current $25.5 billion state budget for 2010-11 that would have to be closed by June 30.
“We need agencies to go start working their numbers,” Rainwater said.
The lawsuit could complicate already difficult budget negotiations.
The cuts would fall on agencies and public colleges working through several rounds of budget reductions over the last two years and bracing for even more.
Rainwater had already asked departments and colleges to devise proposals for cutting up to 35 percent of their state funding, as a starting point for the haggling over how to balance next year’s 2011-12 budget, which is estimated to have a $1.6 billion shortfall.
So, agencies now will be planning for possible cuts this year as they try to work through scenarios for slashing even more next year.
