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Tensions Grow, Along With State Deficit

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Skies may actually be clear over Baton Rouge today, but gloom hangs over the state capitol, as the Revenue Estimating Conference downgraded Louisiana’s income forecasts Monday. That means there’s a $103-million shortfall for the current fiscal year. And the deficit for the next budget year, which starts July 1, has ballooned to $1.6-billion.

The strain of trying to pay Louisiana’s bills is already showing, with state Treasurer John Kennedy and Commissioner of Administration Kristy Nichols bickering over closing the books on the last fiscal year. At issue was $300-million the administration said it “found” last summer.

Bradley Crier with the Legislative Auditor’s Office explained at the Revenue Estimating Conference meeting the funds were just sitting in the state General Fund.

“These are moneys that have been rolling forward year after year, between 300- and 400- million dollars, as far back as we have records,” Crier said, adding that they know the money has been there since at least 1997, and has never been used.

“This should have been reported,” Nichols stated.

Treasurer Kennedy said he’s not the official bean counter.

You’re the state’s accountant,” Kennedy told Nichols. “The reporting was done on documents prepared by accountants at the Division of Administration.”

Kennedy also took Nichols to task for failing to notify either the Legislature or the Revenue Estimating Conference of the existence and source of the “found” money.

“You promptly issued a press release saying we had a surplus, without explaining the $300-million,” Kennedy said.

That criticism didn’t sit well with Nichols, who retorted, “You came to the table, clearly, to point fingers.”

Kennedy wasn’t stopping, however.

“We did not have a surplus last fiscal year. We had a deficit. Our expenses exceeded our revenues,” he explained.

Nichols disagreed, saying there was no deficit, because deficit reduction measures were not triggered.

“If we report a deficit, we have to make reductions to relieve the deficit. That’s what the law requires,” Nichols insisted.

“And I’m just telling you that you can try to put lipstick on the pig, but it’s still a pig,” Kennedy responded.

Ultimately, the Revenue Estimating Conference voted to say that the 2014 fiscal year did end with a surplus, though they designated the rolled-over funds as “one-time money.” That means it cannot be used to fill this year’s budget hole, which Nichols says will be reconciled with budget cuts, instead. That surplus can’t be used to cushion the fiscal blow next year, either, so the tensions -- like the budget hole -- continue to grow.

Copyright 2021 WRKF. To see more, visit WRKF.

Sue Lincoln is a veteran reporter in the political arena. Her radio experience began in the early ’80s, in “the other L-A” — Los Angeles.

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