Treasurer looking for ways to cut corners

Published 12:00 am Friday, October 9, 2009

By David Vitrano


LAPLACE – State Treasurer John Kennedy has been making the rounds lately trumpeting the efforts of the Commission on Streamlining Government. He chairs the commission’s Advisory Group on Efficiency and Benchmarking Recommendations.

He said the state’s budget has been inflated for the past few years by an influx of federal dollars, and the state must now figure out how to operate with a few billion fewer dollars.

The advisory group has outlined 15 ways in which this can be accomplished.

Chief among the proposals, and most controversial according to Kennedy, is reducing the number of government employees in the state. He noted Louisiana ranks first among southern states in number of government employees per 10,000 residents. His plan is to eliminate 5,000 government positions each year for the next three years. He said this will save the state $600 million to $1 billion. Part of that money could then be used to increase the salaries of the remaining workers.

Under the proposal, the state would not lay off or fire any employees but instead not fill vacant positions.

Kennedy said Alabama operates with about 15,000 fewer government workers even though its population is greater than that of Louisiana.

Kennedy’s advisory group is also taking aim at the governing systems of Louisiana’s various colleges and universities.

He, unlike some of his colleagues, does not believe the number of schools should be reduced. He instead thinks the state’s public institutions of higher learning should be consolidated under the State Board of Regents, which currently oversees the Louisiana State University System.

“Thirty-four percent of Americans have a college degree. Twenty-two percent of Louisianans have a college degree. If we eliminate some of our universities to make higher education less accessible, we’ll never close that gap,” he said.

“I don’t think we have too many schools. I think we have too many schools that are all trying to do the same thing.”

By consolidating the governing bodies, he explained, the various systems will no longer have to compete with each other for limited state funding. In this way, programs offered at the different institutions could be targeted more efficiently. The result would be a reduction in the quantity of programs but an increase in their quality.

He noted LSU in Baton Rouge would remain the state’s flagship institution.

A third major point of Kennedy’s plan deals with the state’s capital outlay budget, which is the portion of the budget set aside for construction projects. Currently, about half of that money is being used to build meeting halls, museums and arenas throughout the state. Kennedy noted, however, Louisiana currently has about a $12.5 billion backlog of road construction projects.

Kennedy would like to see a law passed committing 75 percent of the state’s capital outlay budget to road construction. By doing so that $12.5 billion shortfall could be reduced to $6 billion.

“There’s a very famous study posted on the Federal Highway Administration Web site that predicted for every $1 billion you spend on infrastructure, it will create 49,000 permanent jobs,” said Kennedy.

Kennedy stated he was not sure what the governor or the legislature will do when they take a look at the various proposals, but the only alternative, in his opinion, is to raise taxes. The proposals will go before the full commission sometime this month.

Despite Louisiana’s recent budget woes, he believes the state has not suffered as much as many other states as a result of the recession.

“Our economy’s sound. We’ve seen a little bit of downturn. Our unemployment rate has crept up a little bit … but we are perfectly positioned,” he said, adding, “Good days ahead, I think.”