Mary Landrieu Has Good Point on Coastal Fund

U.S. Sen. Mary Landrieu, taking a break from national issues, is urging the state Legislature to limit the use of the state’s coastal wetlands trust fund as a pass-through account to turn one-time revenue into supposedly recurring revenue that can be used to plug annual budget gaps.

She has a good point.

As I wrote a few weeks ago, the wetlands trust fund itself doesn’t really suffer from this maneuver in the short term. But as I also wrote (while citing a report by the Public Affairs Research Council),  “[B]y setting the precedent of using for non-wetlands purposes any money categorized, however briefly, as part of the wetlands trust, the administration ‘diminishes the integrity of the Coastal Fund’ — with potentially harmful legal or political consequences down the road.”

That said, perhaps there ought to be a tiny bit more leeway, within state budget rules, for “non-recurring” revenue to be used to shore up short-term budget holes. The simple fact is that because of how all the budget rules/laws interact with each other, it is quite likely that the state will, each year, benefit from officially “non-recurring” revenue of one sort or another — so that what is categorized as a temporary windfall is actually a fairly predictable benefit for state coffers. It’s complicated. I absolutely support the general idea of the existing prohibition, but perhaps an amendment might be considered that allows up to, say, just 10 percent, or even 5 percent, of any non-recurring revenues to be tapped for annual budgeting purposes. That small amount of leeway can’t harm future budgets too terribly, but it would provide a little wiggle room — and by providing wiggle room, it would take away some of the incentive for governors like Jindal to use somewhat sneaky means, such as the wetlands-fund pass-through, to circumvent the restrictions.

Either way, though, to the extent that the Jindal maneuver runs afoul of the basic spirit (if not the letter) of the current restriction, it is not a salutary budget practice. Landrieu is right to support a bill to foreclose the subterfuge. The wetlands trust fund is too important to allow its integrity to be threatened.