Monday, February 9, 2015
[I]n the Louisiana capital, there is mostly one topic on everyone’s mind these days, and it is quite distressingly close to home: the fiscal reckoning the state is facing for next year and perhaps for multiple budgets to come.Sound familiar? There's more.
“Since I’ve been in Louisiana I’ve never seen a budget cycle as desperate as this one,” said Robert Travis Scott, the president of the Public Affairs Research Council, a nonpartisan group based in Baton Rouge.
Louisiana’s budget shortfall is projected to reach $1.6 billion next year and to remain in that ballpark for a while. The downturn in oil prices has undoubtedly worsened the problem, forcing midyear cuts to the current budget. But economists, policy experts and lawmakers of both parties, pointing out that next year’s projected shortfall was well over a billion dollars even when oil prices were riding high, turn to a different culprit: the fiscal policy pushed by the Jindal administration and backed by the State Legislature.
In a state the size of Louisiana, the shortfall is huge. But it is all the more daunting considering that the governor has unequivocally ruled out any plans for new revenue, bone-deep cuts have already been made to health care and higher education, ad hoc revenue sources have been all but drained and robust economic growth has yet to materialize.
“The underlying economy has been weaker or more sluggishly growing than we might want to believe,” said Greg Albrecht, the chief economist for the Louisiana Legislature, ticking off a list of metrics that are not picking up steam, including total payroll employment growth and personal income tax receipts.This is fill-in-the-blanks stuff. Write a story about what happens in a state run by right wingers who promise they can keep all the necessary government services running just fine and lower taxes at the same time, but leave out the names of the governors and the states. You can use it with Governor Jindal in Louisiana, Governor Brownback in Kansas, Governor Walker in Wisconsin or Governor Ducey in Arizona. Change the name, the story's the same.
“We made an explicit decision and commitment that we were going to cut the government, the public sector economy, as opposed to the private sector economy,” [Jindal] said.
Louisiana’s higher education budget, one of the few discretionary targets, has been slashed by more than just about any other state since 2008; there are a thousand fewer full-time college faculty members on the state payroll, and next year Louisiana State University, the state’s flagship institution, is facing a potential 40 percent cut in its operating budget. Possible cuts to health care for next year, when compounded by the loss of matching federal dollars, could approach $1 billion.
Gov. Sam Brownback and the GOP-dominated Legislature this past week worked out plans for closing a $344 million deficit and allowing the state to pay its bills on time into the summer. The plans included cuts to predictable targets, such as education spending and public pension contributions, but also diverted money from highway projects, which are especially prized by the governor's rural supporters.
The extent of the cutbacks brought home the impact of the income tax reductions that Brownback, an outspoken fiscal conservative, has pushed through since taking office in 2011.
Many of Brownback's allies have supported the cuts he's made to cover the revenue lost from his tax measures, which dropped the top rate for individuals by 29 percent and exempted 191,000 business owners altogether. Brownback has argued that lower taxes would attract more businesses to Kansas and benefit the economy.
But revenues have fallen short of expectations, and Kansas' credit ratings were downgraded last year.
Brownback this week proposed cutting spending on public schools and state universities by $45 million, prompting education supporters to warn about potential hikes in tuition and losses in summer school programs and classes for at-risk students.