Attorney General James “Buddy” Caldwell punted, Gov. Piyush Jindal wouldn’t listen and State Treasurer John Kennedy…well, he is, after all the state treasurer.
The three statewide Republican officeholders were named defendants in a lawsuit filed by two Republican state representatives on Tuesday. One of those was Cameron Henry of Metairie who Jindal had bounced from his vice-chairmanship of the powerful House Appropriations Committee in November after Henry voted for a motion by Rep. Katrina Jackson (D-Monroe) that the administration opposed.
Rep. Joe Harrison also was removed from the Appropriations Committee in the showdown vote in which the administration came perilously close to losing its move to award the third party administration contract for the Office of Group Benefits.
The other plaintiff in Tuesday’s lawsuit was Rep. Kirk Talbot of River Ridge.
Reached for comment, Talbot said the suit simply seeks a declaratory judgment on three major issues with which he, Henry and other legislators disagree with Piyush.
“We are not seeking an injunction,” he said. “We’re not trying to shut state government down. We are simply seeking a ruling on the constitutionality of the governor’s submitting an executive budget with contingency revenue and the spending of one-time money on recurring expenses.”
He said last year’s budget contained contingency expenditures. “That would be, for example, the inclusion of anticipated revenue for the sale of prisons or state hospitals. If the sales don’t materialize (they didn’t in the 2011 session), then we have a problem, a financial shortfall.”
Likewise, he said the suit is also seeking a decision on the requirement under state law that the governor’s executive budget “shall not exceed the official of the Revenue Estimating Conference (REC)” estimates and also per state law, appropriations from the state general fund and dedicated funds in the final, enacted bills comprising the state budget “shall not exceed the official forecast in effect at the time the appropriations are made.”
The official revenue forecast for fiscal year 2012-2013 at the time House Bill 1 was passed, as issued by the REC on April 24, 2012, reflected just over $8.1 billion in state general fund revenue available for appropriation.
Instead, the amount actually appropriated in HB1 was $8.34 billion, thus exceeding the REC estimate and the constitutionally-mandated appropriation limit by $240 million, the suit says.
The REC is required by law to meet at least four times per year—by Oct. 15, Jan. 1, the third Monday in March and Aug. 15 subsequent to final adjournment of the regular session. State law requires the REC to establish, by Oct. 15 of each year, an official revenue forecast for the ensuing fiscal year, that runs from July 1 to the following June 30.
State law requires that legislative enactment of the state budget must conform with a subsequent revised forecast issued by the REC by the third Monday in March.
“The REC did not meet by Oct. 15, 2011, by the third Monday of 2012, by Aug. 15, 2012 after adjournment of the 2012 regular session, or by Oct. 15, 2012, as required by law,” the petition says.
The Jindal budget also included $35 million in contingency revenue from the anticipated sale of New Orleans Adolescent Hospital and HB 822 directed State Treasurer John Kennedy to transfer $35 million of the proceeds from the sale or lease of the facility to the Overcollections Fund.
After numerous delays, the Jindal administration finally released the appraisals on the hospital property in November. That appraisal showed the property worth, at most, $20.9 million.
Rep. Neil Abramson (D-New Orleans) has questioned how the Jindal administration arrived at a $35 million estimate. “I was surprised to see the money in the budget at all because that property’s in my district and no one had ever said anything to me,” he said.
Welcome to the real world, Mr. Abramson. That the way the Jindalistas do business.
“…There is no reasonable basis for expecting the New Orleans Adolescent Hospital to, in fact, sell or lease for $35 million during the 2012-2013 fiscal year,” the lawsuit said. “As such, appropriations of those funds are, in fact, prohibited contingent appropriations.”
Henry, reminded that Piyush had already demoted him once, jokingly feigned innocence at first. “This is all Talbot’s fault,” he said. “I thought I was signing up to buy Girl Scout cookies. Next thing I know, I’m a plaintiff in a lawsuit.”
He quickly turned serious, however.
“We first sought a legal opinion from the attorney general and he told us he would not render an opinion on the constitutionality because that was a matter for the courts.
Gov. Jindal forced us to do this. He thinks he is right and we think we’re right. If we are ultimately found to be right, we can avoid a repeat of the practices that have put us in such a fiscal dilemma,” he said.
The lawsuit has been assigned to 19th Judicial District Court Judge Tim Kelley who is married to Jindal’s one-time commissioner of administration Angéle Davis.
Kelley, in another lawsuit, ruled in December that Jindal’s school voucher program unconstitutionally diverted public funds to private and parochial schools. That ruling is presently under appeal.