The head of Louisiana’s main business association on Wednesday offered a grim take on the state’s current financial outlook: “a limping, fragile economy.”
With Louisiana facing a $1.9 billion budget shortfall, Stephen Waguespack, president of the Louisiana Association of Business and Industry, suggested lawmakers rework what’s considered discretionary spending within the state’s annual $25 billion budget. The state spends nearly 90 percent on required expenditures, while visible areas like higher education, corrections and health care are paid for with discretionary money, meaning they’re often the easiest place to make cuts.
Waguespack said if more of the budget was discretionary, more state department heads would have to plead their cases to retain funding.
“Let’s not fool ourselves; this isn’t the first time we’ve had this conversation,” Waguespack said Wednesday at a breakfast hosted by the Jefferson Parish Chamber of Commerce. “This is the same debate we’ve had off-and-on again for decades.”
Gov. John Bel Edwards is expected to call a special session Feb. 14 to start tackling the looming fiscal crisis.
Waguespack also made a case against curtailing or ending the state’s fast-growing network of tax giveaways.
Despite the incentives, big corporations aren’t tripping over themselves to relocate to the Pelican State, he said, pointing to specialty chemical maker Albemarle Corp. and health care power Amedisys Inc., two publicly traded firms that decided last year to relocate their headquarters from Baton Rouge.
“In a soft economy like we’re facing this year going into 2016, do you really think that is going to lead us into the promised land?” he said of the incentives.
Michael Hecht, president and CEO of Greater New Orleans Inc., a regional economic development group, pointed to Louis Armstrong New Orleans International Airport as a tool for helping draw more business to the state. “I don’t think there’s any single lever that you can pull that’s going to have a greater systemic impact than airlift,” he said, “and particularly international airlift.”
Waguespack echoed other areas that he contends are primed for savings, including reining in state pension systems, which he said cost $2 billion a year.
He also said the state has too many publicly-funded four-year schools, noting that Louisiana’s 14 outnumber Florida’s 12, despite having less than a quarter of Florida’s population. That was one of several issues highlighted recently in “Cutting Classes,” The Advocate’s eight-day series examining the state of higher education in Louisiana.
Follow Richard Thompson on Twitter, @rthompsonMSY.