La. surplus dispute likely to linger for months

BATON ROUGE (AP) — Did the state close last year’s books with a surplus or a deficit?
Seems like an easy question to answer, a simple comparison of state expenses against revenues. But the Jindal administration’s claims of a nearly $179 million surplus have run into skepticism about the accounting maneuvers used to generate the figure.
Gov. Bobby Jindal’s top budget adviser, Commissioner of Administration Kristy Nichols, says the administration identified millions that hadn’t been calculated over several years.
Treasurer John Kennedy says the method strays from Louisiana’s traditional accounting practices, which would show the state with a nearly $141 million deficit from the budget year that ended June 30.
That’s a difference of $319 million that could decide if the state has a budget gap to close from last year or money to help address next year’s looming $1.2 billion shortfall.
Lawmakers will sort through the conflicting stories at a Friday hearing, but the final figure likely won’t be determined until early next year after auditors comb through the numbers.
“It could take some time to see if this is correct,” Patrick Goldsmith, director of the state House Fiscal Division, said of the surplus.
Goldsmith said while the method used by the Jindal administration “sounds like it could be something that could be correct,” the Legislature’s financial advisers wanted the auditor’s office and the treasurer’s office to weigh in with their opinions.
Thomas Cole, director of financial audit services for the legislative auditor’s office, said auditors won’t be finished with their review until December. It’s traditionally presented to lawmakers in January.
“From our perspective we won’t be able to do anything with that number until our audit is complete,” Cole said Thursday.
Meanwhile, before the dollars could be spent, the state’s income forecasting panel — called the Revenue Estimating Conference — must agree that a surplus exists. The conference won’t look at the issue until January, after the auditors finish their review.
The Jindal administration hasn’t released a specific list of where it located the extra $319 million to reach its surplus figure, but Nichols said agencies have dollars from fees and other self-generated sources of cash that haven’t been spent or calculated for years.
“It is cash on hand,” she said. “I think the Legislature will be clear that the funding will be available.”
Nichols office released a statement from Legislative Fiscal Officer John Carpenter that offers preliminary support.
“We will get more details as we begin a more formal review, but it does appear that there was a balance carried over from prior years that should be included in this report,” Carpenter said.
But Kennedy, who has criticized the Republican governor’s budgeting tactics, said he’s concerned the administration has manufactured a surplus using “funny math.”
“We need to a call a timeout before we start spending this money,” the Republican treasurer said in a statement.