Associated Press - November 3, 2009 2:44 PM ET

BATON ROUGE, La. (AP) - A government cost-cutting panel has rejected a bid by state Treasurer John Kennedy to cut all legislative earmarks for nonprofits and other nongovernment agencies from the budget.

The Commission on Streamlining Government, which is looking at ways to shrink state spending, voted 8-2 against Kennedy's idea.

Kennedy says much of the spending is a waste, and he says the worthwhile organizations that deserve funding should contract through state agencies to provide services, rather than request special treatment from a legislator.

But lawmakers on the commission and Gov. Bobby Jindal's top budget adviser argued the existing earmark process provides transparency by requiring the groups to fill out detailed forms before receiving state cash and submitting to audits of their spending.

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