Kennedy discusses state budget at Rotary

CROWLEY - Louisiana State Treasurer John Kennedy told the Crowley Rotary Club Tuesday that things are not always as they seem with the state budget.

The state entered this fiscal year with a $26.9 billion dollar budget, up 42 percent from just five years ago which boasted a nearly $19 billion state budget.

Next fiscal year’s budget will see a decrease, however, the budget is projected to be $24 or $25 billion.

“I can tell you why that’s happening,” said Kennedy. “One part is the declining revenues, but the biggest issue this year came when the legislature decided to balance this year’s budget with $2.8 billion of one-time money that was mostly stimulus money. The expenses will now still be there next year, but the funds will not.”

According to Kennedy there are two options to solve this problem, raise taxes or cut spending. Kennedy is in favor of cutting spending in numerous areas and recently submitted 16 ideas to balance the state budget through spending cuts that would also not destroy health care and higher education.

Among his ideas, cutting of 15,000 state jobs over three years, 5,000 per year, by not filling one-third of all vacancies at the end of each of the three years.

“We could save between $400 and $600 million by cutting these jobs,” said Kennedy. “It will take some political courage to go through with these plans.”

Next year’s projected budget has worried many over the past few months, but Kennedy says the decrease should not mean catastrophic cuts to health care and education.

“We have enough money at $24 or $25 billion to be number one in the country in higher education,” he said.

Another point of focus for a decrease in spending in consulting contracts. The state currently has 19,000 consulting contracts.

“Anyone could go through the list of contracts and find at least 10 percent that are not more important than things like higher education, health care and coastal restoration,” said Kennedy. “It’s not that the money is being wasted but we need to set priorities. I know we can eliminate 10 percent.”

Kennedy says that cutting 10 percent of the contracts could save the state $750 million annually. He also believes the state could further save money by decreasing the remaining contracts by 5 percent each, the savings could reach $1 billion.

Kennedy stressed the importance of a plan going into next year, over the alternative that would likely lead to problems for the state after the spring assessment.

“What we are debating here is not where Louisiana will be next year or even the year after that,” said Kennedy. “It’s a matter of where the state will be a decade now.”

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