The Devil in the Details: Cameron Henry Portrays Krampus

“Is it really appropriate to thumb your nose at the state Constitution, driven solely by a desire to fight with the Governor?” – Jay Dardenne, Louisiana Commissioner of Administration

In old Europe, particularly parts of Germany, the Feast of St. Nicholas on December 6 would be preceded by the appearance of a devilish creature known as Krampus, on the night before. His task, in contrast to the gift-giving St. Nicholas, was to punish misbehaving children. In the modern day Louisiana Legislature, the annual lawmakers’ Christmas celebration is preceded by a day filled with committee meetings, including a constitutionally-required gathering of the Revenue Estimating Conference. And now, for the second year in a row, the REC has hosted its own Krampus – a stand-in for the House Speaker – portrayed by a lawmaker who is fond of the phrase, “the devil is in the details.”

The Revenue Estimating Conference meeting of Thursday, December 12, 2019, started cheerfully enough, with the introduction of the panel’s new member economist, Dr. Stephen Barnes from U-L Lafayette. The other members of the quartet are Commissioner of Administration Jay Dardenne, Senate President John Alario, and – substituting for House Speaker Taylor Barras – House Appropriations chairman Cameron Henry. Their task? To adopt the official forecast for FY’21, so the Governor could begin preparing his budget proposal.

Both the Legislative Fiscal Office and the Division of Administration developed forecasts recognizing more state revenue than what was last projected in April. The LFO’s Greg Albrecht suggested an increase of $235-million over the previously projected $9.56-billion, while the DOA’s Manfred Dix recommended a more conservative addition to the state income figure, an increase of $168-million.

Is that a “Bah, Humbug!” I hear?

Before the panel members began their usual detailed questioning of the various factors prompting the numbers that were being proposed, Albrecht told them his forecast contained a known error.

“It’s in the number for unclaimed property,” Albrecht explained. “The statute allows the Treasury Department to retain seven percent of collections, and traditionally the Treasury annually gives a portion of the overage to the State General Fund. Treasurer John Schroder says he will not do so any longer. That will take about $20-million out of the General Fund that’s normally been there.”

“The Treasurer’s transfer of the revenue excess goes back more than 35 years,“ Alario interjected.

“That’s right,” Dardenne said. “But now we’ve received a letter from John (Schroder) that says, basically, ‘I’m keeping the money. I’m nt transferring it to you, and I’m not going to transfer it to you as long as I’m Treasurer.’ However the law requires, and we have an expectation that, the Treasurer would transfer 20 to 25 million dollars, making it available for the legislature to appropriate in supplemental budget bill. It is the Legislature that appropriates money and decides how it is spent, not the Treasurer.”

“Is the money the individual’s or the state’s?” Rep. Henry asked Albrecht.

“It’s the property of the individual,” the fiscal analyst replied.

“So this is not our money in the first place, and we should not count on the individual not coming forward to claim it. It is a state liability, and therefore not our money to spend,” Henry stated. “I see the discrepancy.”

“Nobody’s suggesting the Treasurer not give back the money, but he is not entitled to hold onto it,” Alario remonstrated. “We do not intend to curtail the Treasurer’s job, but he is not to curtail the legislature’s job, either.”

“The state Constitution tells us that all money shall be deposited in state Treasury, and the process is set out in law for the Unclaimed Property funds. The Treasurer does not have the authority to hold onto the money!” Dardenne insisted. “So stay tuned: this isn’t over, because he is not following the law.”

In the afternoon, the Treasurer sent out a press release, stating he had officially notified the REC he is “ending the practice” of transferring Unclaimed Property money to the State General Fund annually.

“It infuriates me that big government takes it upon itself to decide what does and doesn’t belong to Louisiana citizens,” Treasurer Schroder says in the press release. “Clearly this money belongs to the rightful owners, and it’s my job to return it.”

And now, some Grinchery

Courtesy: Cat In The Hat Productions

The panel, returning to consideration of the forecast, had questions for the fiscal analysts regarding national predictions of a coming recession, and if – or how – that factored into their revenue projections.

There is much talk of a recession in 2020,” Dix replied. “Some say there’s a 50% chance in 6 months. Moody’s says 11%, so it’s all over the map. I think there will be a slowdown in 2020, so my prediction leaves a bit less revenue overall than what was received than 2019.”

“So do you expect the slowdown in this fiscal year, before the end of June, or after, into the next fiscal year?” Alario asked

“I expect it in the last quarter of current fiscal year,” Dix answered.

“There’s your Grinch story,” Alario quipped.

“Krampusing” the REC’s style

“What factors do you think will be driving recession in Louisiana?” the House Appropriations chair inquired.

“Energy prices, the trade war, and tariffs,” Dix, the DOA’s analyst, responded.

“Thank you,” Henry replied. “The devil is in the details, and I’m just trying to get people educated on what’s coming.”

The group’s new economist, Dr. Barnes, asked if there was anything on the near horizon that promised growth potential for state revenues, and how much. Maybe two percent, was Dix’s response.

“And that’s all inflation,” the LFO’s Albrecht added. “Most of our forecast modeling goes down compared to last year’s actual revenues. It’s going up, relative to a baseline, but going down compared to the actual collections. Both Manfred and I have some caution built in for a slowdown in the economy.”

“That’s good, the more conservative we are,” Alario commented. “But we still have to have some numbers so the Governor can present a budget in March.”

“You both acknowledge there’s national discussion of a coming recession,” Dardenne said, “But traditionally, any recession hits Louisiana months – even a couple of years — later than the rest of the country. This is your best guess, and both of you believe the forecast should be adjusted, and adjusted upward?”

“Yes, sir,” Dix and Albrecht answered in unison.

“Then it appears it is time for a motion” Dardenne said. “We are guided by the state Constitution, with words that say ‘the responsibility of the Revenue Estimating Conference is to establish an official forecast for the coming fiscal year.’ As we sit here today, we do not have an official forecast for FY 21. The law also says we are to meet before the end of the calendar year, to allow the Governor sufficient time to prepare a budget. We are a Revenue ESTIMATING Conference, we ESTIMATE what we think the revenue will be. In the spirit of compromise, I move that we adopt Manfred’s, because it is more conservative, and the less optimistic forecast.”

“I object,” Henry said.

“Chairman Henry, it is fruitless to require new legislators, who already face a steep learning curve, to have to take up this discussion in a couple of months, in addition to everything else,” Dardenne said. “Is it really appropriate to thumb your nose at the state Constitution, driven solely by a desire to fight with the Governor? With all due respect, Senator-elect, if you don’t like the process, file a bill to change the law and amend that process. We tried this whole exercise last year and ultimately ended up agreeing that yes, things really were a little better. All the mess could be avoided. We have a responsibility to establish a forecast. By refusing to do so, we are shirking our constitutional responsibility.”

“Yeah, we did do this last year, but we were more accurate,” Henry responded to Dardenne. “Mr. Manfred says there’s the possibility to come back in March. We do know now we have an issue with unclaimed property, so we know the estimate is inaccurate. And I think it’s important to leave it to the new people coming in. It’s time we start doing things differently.” Understand each other, but don’t agree.

“Without this, there cannot be an executive budget presented at the designated time,” Dardenne insisted. “There are several things the Joint Budget Committee won’t be able to do this afternoon because of this., including important marsh creation and storm protection projects through the Coastal Protection and Restoration Authority.”

“I know that’s an important project, but not as important as the overall state of the budget process going forward,” Henry fired back. “We understand each other, but we don’t agree. I’m trying to prevent us from having a non-workable budget.”

“In the end, we still have to educate children, build and repair highways,” Alario said. “We are in neglect of doing our job if we don’t take care of this today. Please call the roll:”

“President Alario?”

“Yes.”

“Doctor Barnes?”

“Yes.”

“Commissioner Dardenne?”

“Yes.”

“Chairman Henry for Speaker Barras?”

“No.”

“Then I move we adopt Greg’s forecast,” Dardenne said, and again Alario asked for the roll call.

Yes, came the first three responses, with another no from Rep. Henry.

With a sad sigh, Alario announced, “The motion fails to carry, as it requires a unanimous vote.”

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Sue Lincoln
Sue Lincoln is a veteran and widely-respected reporter who has been covering Louisiana politics for nearly three decades. Originally from Long Beach, California, Sue’s career in journalism began on the radio in Los Angeles. After moving to Louisiana, Sue earned her bachelor’s degree. For ten years, from 2000-2010, she was the Assistant News Director at Louisiana Network. Sue also worked as the education reporter for Louisiana Public Broadcasting and has contributed to various state publications as a freelance journalist. But she is perhaps best known as the voice of the popular politics Capitol Access.