Questions raised about House budget proposal

BATON ROUGE (AP) — Senators were skeptical Thursday about assumptions House lawmakers used to balance next year's $25 billion budget proposal and whether the dollars will add up for spending.

Questions were raised about whether the money estimated to be generated by proposed trims to tax break programs will pan out, if the cuts proposed to state agencies would be workable and if changes sought for the budget development process would be too restrictive.

The Legislature's chief economist suggested to the Senate Finance Committee that a central piece of the bipartisan compromise devised by the House — $200 million anticipated from a tax amnesty program — could come up short of the estimate.

The discussion came as the Finance Committee began combing through the House-backed version of the budget for the fiscal year that begins July 1, to decide what senators might want to change. They have a bit of money to work with, after the state's revenue forecasting panel improved income projections, giving lawmakers more money to spend.

Sen. Greg Tarver, D-Shreveport, questioned how the House decided to plug $200 million into its budget recommendations from a planned tax amnesty program.

"With your experiences, would you use the figure of $200 million to budget, or less?" Tarver asked Greg Albrecht, the chief economist for the Legislative Fiscal Office.

"I actually wouldn't use a figure to budget at all, senator," Albrecht replied.

Tarver responded, "Are you just saying they pulled a figure from the air and utilized it?"

"I don't know where the figure came from," Albrecht answered.

House budget crafters have said they looked at the state's experiences with a previous tax amnesty program, along with the outstanding tax debts that could be collected, to devise what they considered a workable estimate.

The amnesty initiative is a key part of the funding used to replace nearly $500 million in patchwork dollars proposed by Gov. Bobby Jindal for next year's budget, but that lawmakers in the House didn't support using.

Lawmakers didn't want to pay for continuing programs with financing from property sales, legal settlements, fund sweeps and other items that haven't yet happened and that would only drum up money for one year.

The House compromise would replace those dollars with the tax amnesty money, $106 million in cuts to state agencies and $83 million expected from shrinking spending on tax break programs.

Tarver said it appeared the House replaced one uncertain funding source with another.

Sen. Fred Mills, R-Breaux Bridge, questioned the House's proposal to remove nearly $50 million in state funding Jindal had sought for an increased use of services expected in the Medicaid program.

Senate financial analysts said the cuts could force cuts to services or to the rates paid to health providers who take Medicaid patients.

"That number does not seem to be realistic," Mills said.

Other questions came up about the assumed savings from tax break reductions.

For example, the Legislative Fiscal Office analysis for one bill that would shrink Louisiana's generous film production tax break says since the reduction would only hit productions approved after July 1, significant savings might take several years to materialize.

House Appropriations Committee Chairman Jim Fannin, D-Jonesboro, handles the budget bill in the House, but he was largely sidelined in the negotiations. As he presented the spending plan to Senate Finance, Fannin joked about sending flawless budget proposals in prior years.

"But this one, you might check it out a little bit more carefully," he said.