BATON ROUGE, La. - While Gov. Bobby Jindal proposes ending the state income tax, he’s coming under increased fire for his practice of balancing the budget by raiding statutory funds dedicated to specific off-budget programs.
One such program is the Artificial Reef Development Fund, also known as the Rigs to Reefs Program. Since 2010, Jindal has taken $45 million from the fund to cover budget overruns, and after sitting on their hands for a few years, the commission that oversees the program is considering fighting against the governor who appointed them in order to recover the money.
The Wildlife and Fisheries Commission held a closed-door session today in Baton Rouge to consider filing suit. The board, which is entirely comprised of Jindal appointees, did not take any action on the matter Thursday, but its leaders say they are convinced that the governor’s use of the money violates the state Constitution.
“It's in the Conservation Fund and the Conservation Fund is protected by the Constitution,” said Ronny Graham, the board’s newly installed chairman. “The money that comes into the Rigs to Reefs Program or the donation to the Conservation Fund into that, it specifically says it should be used for that program.”
The fund was set up to collect donations from oil companies when their offshore rigs come to the end of their useful lives.
The companies agreed to give the Department of Wildlife and Fisheries the old rigs and half the money they would have spent to disassemble and remove them so the state can pay to move the structures and turn them into fisheries habitats.
Every act of donation explicitly says the money is “to be placed in the Artificial Reef Fund for the benefit of the Louisiana Artificial Reef Development Program.”
The commission started considering legal action last year, when Ann Taylor was chairwoman. She said the rules are clear: The money is only supposed to go for building reefs and similar fisheries-related projects, such as a $24 million research center built on Grand Isle.
She didn’t want to discuss what was said in executive session, but she said that if any more money is taken from the fund when Jindal proposes his 2013-2014 budget on Feb. 22, the commission should do “everything in its power” to protect the fund.
“I wish we could get (the $45 million) back but I don't know if that's going to happen,” she said. “I think that we're just going to watch and take the appropriate action if anything does happen” in the next budget.
But the Jindal administration has taken a more liberal view of the qualified uses of the fund. In 2010, it took $18 million from the funds’ $44 million balance to cover general fund shortfalls. In the 2011-2012 fiscal year, it took $27 million to pay Medicaid expenses. As of Jan. 30 of this year, the fund had just $13 million in it.
“We're confident that the law has allowed for unused, excess dollars to be used to protect higher education and health care,” said Kristy Nichols, Jindal’s commissioner of administration. “Any time we use statutory funds in this way, we ensure that the core mission of the fund is protected.”
But, as conservative budget hawk Rep. Cameron Henry, R-Metairie, points out, the core mission of the fund is not education or health care in any way. In fact, the oil companies are promised that the donations will go only to building the reefs.
“The oil companies are paying into this for a specific purpose and our constituents believe we're taking this money and using it the best to save the coast,” Henry said. “I mean, that's what Louisiana needs to do, and we're not going that route.”
And Henry also notes that the administration did not use the money exclusively for education and health care. In fact, news reports in 2010 said that more than $12 million of the $18 million taken from the fund that year financed legislative pork.
“They've used it for slush funds, for projects for members (of the Legislature),” Henry said.
Henry and another conservative legislator, Rep. Kirk Talbot, R-River Ridge, have already sued the state attorney general and treasurer for what they say are Constitutional violations in the use of hundreds of millions of dollars from one-time revenue funds, including the Artificial Reef Fund.
“The Handgun Permit Fund, the Litter Abatement Fund -- all these permits we have that people pay into when you get your driver’s license or your conceal and carry permit, used for a specific purpose -- and the administration goes in at the end of the year and sweeps those funds and uses it for their discretion,” Henry said.
And it’s not just those on Jindal’s right flank who are appalled. Watchdogs on the left say it’s wrong, too.
“For years now we've been cobbling together budgets and not having enough money each year to fund the things we claim to care about: health care, education, transportation and infrastructure,” said Jan Moller, director of the Louisiana Budget Project. “So every year the state has had to go in and raid these funds like the Artificial Reef Fund that are set aside for specific purposes.”
Moller didn’t comment on the legality of the fund sweeps, as they’re called, but said they are bad policy because they cover up the real need: to raise more revenue through taxes.
“If it's a decision between do we pay for teachers or do we pay for reefs, I'm siding with teachers every time, so I understand why the governor has been raiding these funds,” Moller said. “But raiding these funds year after year is no way to run a railroad.”