Article Written By Erik Sanzenbach, St. Tammany News
Published on Monday, March 16, 2009 7:43 AM
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State Sen. Jack Donahue, R-Covington, sees a battle brewing over the budget in the upcoming session of the legislature that starts April 27.

As a member of the Senate Finance Committee and the Joint Budget Committee, Donahue said that even with the frugal budget presented by Gov. Bobby Jindal, there will be some hand wringing during the session.

“The big fight will be how to keep services going with less money,” Donahue said.

The governor has told the Legislature there is a projected reduction in revenue of $1.3 billion, which will produce a $1.75 billion gap that legislators will have to close.

Donahue said he would work with the governor to try and close that gap. One of Jindal’s strategies for this is to downsize and streamline the state government, which is just fine with Donahue.

“There just is not enough money there to maintain our government at its current size,” the senator said. “Even though these are tough economic times, this presents us with a great opportunity to reduce the government’s size to match the budget.”

However, he said the big trick to doing that is to downsize and still maintain higher education and health care in the state. Donahue has said the college system in the state is too large and maybe should be pared back.

He suggests taking a close look at all the higher learning institutions and seeing what the state can afford. Maybe consolidating or getting rid of some colleges might be the answer, he said.

“We just have to see what we can afford and downsize,” Donahue said.

Locally, Donahue said he and the rest of the Northshore delegation are working on a bill that would reduce the high property taxes being paid by St. Tammany homeowners.

“We want to reduce the tax burden on people and still help the state,” Donahue said. “It is a difficult task we face.”

One thing he is working on is convincing his fellow legislators to back the governor’s refusal to accept the $98 million from the federal economic stimulus bill that would go to extending the unemployment benefits in the state. Like Jindal, the senator does not want to see local businesses end up paying more for the Unemployment Compensation Fund after the state uses up all of the $98 million. In order to accept the money, the state would have to agree to increase unemployment benefits and increase the number of recipients. When the federal money runs out, the state will have to ask employers to increase their donation to the UCF, which he said would be unfair to businesses, especially those still recovering from Hurricane Katrina.

Besides, he said Louisiana improved the UCF several years ago and has $1.4 billion to help out the unemployed. If the fund falls below the $1.4 billion cap, the state will have to ask businesses for more money added to the money to fill the gap created when the federal money is used up.

“It’s a lose-lose proposition for everybody,” Donahue said.

He said Louisiana is one of the few states that has a “very stable” UCF, and he does not see where federal money will really help.

When asked if the Legislature could pass sunset legislation that would keep businesses from paying extra for the UCF after the federal money runs out, Donahue said that would be politically risky.

“If you expand the UCF and add more people, you will have the problem of telling thousands of people they are off the UCF rolls,” he explained.

He said the state saved the UCF fund before and there is no real reason to add more to it at the expense of business owners.