House Appropriations Committee Chairman Jim Fannin, D-Jonesboro. (Associated Press)
Last Modified: Friday, October 19, 2012 5:47 PM
BATON ROUGE (AP) — Gov. Bobby Jindal's proposal for spending a $143 million surplus violates the law and also breaches an agreement with the House that ended a budget stalemate earlier this year, the leader of the House budget committee said Friday.
House Appropriations Committee Chairman Jim Fannin made his comments as lawmakers received a revised estimate of how much was left unspent when the books were closed on the 2011-12 fiscal year that ended June 30.
The Jindal administration wants to use the leftover cash to help fill a $94 million gap in Louisiana's Medicaid program, to stop a new round of cuts on health care services.
Fannin said that conflicts with a bill he sponsored earlier this year requiring that surplus funding up to $205 million be used to replenish the state's "rainy day" fund, which was tapped to fill a previous deficit.
"We truly have needs. I understand that. But the first requirement is to follow the law," Fannin, D-Jonesboro, said at a meeting of the Joint Legislative Committee on the Budget, directing his comments to the governor's top budget adviser, Commissioner of Administration Kristy Nichols.
Nichols said she didn't agree with Fannin's interpretation of the law. She said the administration's legal position is that the rainy day repayment trigger was only in place for the 2011-12 year and doesn't kick in now that the state is in a new fiscal year.
"We feel like that language was specific to the budget period that has passed," she said.
Use of the rainy day fund to plug a budget gap was rolled into a tense series of negotiations between the House, Senate and the Jindal administration in the last regular legislative session.
Fannin said the House never would have had enough supporting votes for the final budget deal without the rainy day fund repayment.
"That resolution passed only because that language was put there," said Fannin, who shepherded the budget bills through the House.
Since lawmakers wrapped up their work on the $25 billion budget in June, however, the state's financial situation has changed dramatically.
A drop in federal Medicaid financing left a gap of $859 million in the budget. The Jindal administration made $523 million in cuts, largely to the LSU public hospital system that cares for Louisiana's poor and uninsured. Another $94 million in state funding will be needed to draw down the federal matching dollars to fill the remaining hole.
Senate President John Alario, R-Westwego, said he supports the governor's position and thinks the money should be used to solve the health care problem.
"If you don't begin to get creative at this point, you've got some real serious cuts in health care beyond what we've already done," he said.
If the surplus dollars aren't all poured into the rainy day fund, they are limited by the constitution for spending on certain one-time items, like bond payments, retirement debt, construction projects and coastal restoration work.
Nichols said the Jindal administration proposal would follow those constitutional restrictions, and that paying for some of those items with the surplus cash could then free up state general fund money to fill in the Medicaid budget shortfall. Fannin said that was "twisting the constitution."
Decisions on the spending are expected to be debated during the next regular legislative session, which begins in April.