State Treasurer John Kennedy. (Special to the American Press)
Last Modified: Thursday, July 12, 2012 11:34 AM
The state government has had one or two budget shortfalls in each of the last four years, despite the fact that the current year’s revenue is estimated to be $25.6 billion, a 34 percent increase of $6.5 billion from the $19 billion budget in 2005.
State Treasurer John Kennedy used that statement to illustrate the problem he sees in how Louisiana’s government spends taxpayer dollars. Kennedy told the Lake Charles Rotary Club on Tuesday these shortfalls have been devastating to the state’s economy.
“It’s your money — that’s what we spend at the state Capitol in Baton Rouge,” he said. “Some of my colleagues think this money just falls from heaven. We thank heaven for it, but it comes out of your pockets.”
He said half of the $25.6 billion budget is Louisiana taxpayers’ money, and the other half is American taxpayers’ money.
“I disagree with my colleagues who say we don’t have enough money,” Kennedy said. “We have enough money. It’s not about how much money we have; it’s about how we spend the money we do have.”
Kennedy criticized the state’s spending of “one-time money.” In 2005, hurricane relief funds were not included in the budget, but since Hurricane Katrina that one-time money has been up for grabs, he said.
He compared the situation to a businessman receiving a bonus. He said the state spent the money “irrationally.”
“We have an enormous amount of one-time money included in the budget. Many of you might have heard that we didn’t take any stimulus money,” Kennedy said.
“That’s not accurate — we took over $2 billion. Dump that into our operating budget, and the money was spent but the programs that it paid for lived on.
“The other reason we have had these budget shortfalls is because we’re not spending our money properly. In government your priorities aren’t where you say they are — it’s where you spend your money.”
Kennedy complained that the state government touts its priorities as being health care, education, roads and coastal restoration, but that the taxpayer needs to “look past the rhetoric and see where the money is being spent.”
Even though 6,900 state job positions were eliminated by not filling vacancies, Kennedy said the state is spending $650 million more in labor costs since 2005.
He said the reason for the increase is the staffing budget, which is overfunded to pay for “way too many chiefs.” Kennedy said state government can be downsized by not laying off a single government employee.
“If we just had the political courage not to fill one-third of the empty positions each year, and we did that for three years, ... we would free up money,” he said. “That will require the bureaucracy to reorganize.”
Kennedy said the second problem in state government is that it has signed on to more than 19,000 consulting contracts.
“Some of them we need, but some of them we don’t need,” he said. “I’m not saying these contracts are bad or that anything illegal is being done, but what I’m saying is we spend about $7 billion a year on consulting contracts.”
He said the issue is not whether these things are bad, but whether that money could be better spent elsewhere.
Kennedy’s examples of state contracts include a $94,000 program to assist students in learning social skills through organized play at recess or on lunch breaks.
“My 16-year-old doesn’t need help with recess,” Kennedy said. “He’s got that part down.”
Another contract, worth $10,000, includes the sponsorship of Chimpanzee Discovery Days, “involving broad media attention to observation of chimpanzees in a spacious forestry habitat.”
Kennedy said there are “thousands of contracts” like this, spending money that adds up.
“I know we could easily save $250 million to half a billion dollars,” he said. “I know that, but I understand the politics of it. We have to choose. Do we want to lift these universities up or do we want to lift up the politics? We don’t have the money to do both.”
Posted By: Dwight On: 7/11/2012
Title: Consulting contracts??
Consulting contracts consist of 25% of it the state revenue. Is that a back hand way to say that the state is privatizing state government. I wonder how much of it is spent to justify Mr. Jindal's mantra "public education bad"
I did not know that we had chimpanzee's in the wild in Louisiana.