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Location: Nashville, Tennessee, United States

11/21/2002

Louisiana May Tap Surplus to Cover Shortfall
Like many states, Louisiana faces a projected budget gap as projected spending is larger than projected revenue. The state's governor wants to tap the state's "rainy day" fund to fill the gap.

The good news is, Gov. Mike Foster is trying to avoid increasing taxes to fill the shortfall, and the Foster administration has already reduced planned spending this fiscal year by $75 million.

The Baton Rouge Advocate reports: A constitutional amendment passed by voters in 1998 created the Budget Stabilization Fund, commonly called the rainy-day fund, to be covered by budget surpluses in good years. The amendment set rules requiring that extra state money be put into the fund in good years and details how money could be spent during a budget crisis. The administration can spend up to one-third of the fund in a year - about $88 million of the $263 million currently in the fund. Foster needs two-thirds approval from the Legislature to tap the fund.

The governor blames the budget gap on several factors, including $50 million in costs imposed on the state by Hurricane Lili and Tropical Storm Isidore cost the government $50 million, and $3.4 million in costs from the outbreak of the West Nile Virus. Notably, he didn't do as Tennessee Gov. Don Sundquist did: blame the state's budget problems on taxpayers not paying enough taxes.

Foster is a lifelong Democrat who switched his party affiliation to Republican just before running for governor. He appears to be acting here as a conservative Republican.

But looks can deceive. The truth is, the Louisiana budget has grown by over $6 billion during Foster's two terms in office and Foster has steadfastly champion tax increases, and has called legislators who voted against his tax increase proposals "tooth fairies."

So while Foster looks to use the "rainy day" fund for this this budget gap, overall he's one alleged Republican who likes to put the bite on taxpayers.