Even at $24 billion plus, much of that federal funds, Louisiana’s state government takes in too little cash to pay for its obligations. And that’s a problem that goes beyond the headlines that have been generated by the hot political debate on the budget in the State Capitol.
A gifted teacher at LSU, economist Jim Richardson, supplies a homely example for the state’s problem: “We can’t afford to pay for everything on the plate. What do we move off the plate?”
The underlying structural deficit goes beyond the short-term fixes proposed by the House changes to the budget, now awaiting action in the Senate.
One structural problem: Because of politics, for which Gov. Bobby Jindal is hardly alone to blame, there are many things that the state pays for in Louisiana that in many states are paid for by local taxes. There are things we need to move off the state’s plate.
Unfortunately, the needs don’t go away, although the costs could be shifted to another level of government.
As an example, the state now pays a salary supplement for local police officers, something that just about everywhere else is a purely local obligation. It’s very hard to change, not just because of Jindal’s shallow slogans about “backing public safety,” but because it’s easy money for politically influential local officials: They don’t have to go to their voters to raise property taxes for that money.
In fact, supplemental pay is protected in the state constitution, making it much harder to change. Local officials remain under these and many other obligations to the governor.
In this way, Jindal is hardly a reformer: He’s only a linen suit and white bucs away from being a Republican Earl K. Long, just not destined for spectacular trips to the nuthouse.
In terms of state obligations, cutting has been politically easier, surprisingly enough.
Jindal has sharply cut state support for higher education, using some tuition increases to make up part of the difference. This bleeds expenses from the budget that Jindal and lawmakers — even some of those complaining about Jindal-backed cuts now — have used to fund tax cuts, mostly for higher-income families, and tax breaks for large businesses.
Jindal has also raided dedicated funds around state government for ready cash. That’s not as bad as it sounds: If a fund has money in the bank it’s not going to spend in a given year, why not use it to patch up health care and higher education?
There are problems with this approach. One is that the state might in fact need that dedicated fund for some purpose in the course of a budget year, which is why the fund was created in the first place. There is every incentive for any governor to raid first and ponder risks later. Further, it’s a short-term dodge for responsibility for poor financial policy in general.
Another problem with that approach is the governor and Legislature get the money, and don’t grapple with the dedications themselves. Nothing is permanently moved off the plate.
Jindal has been a disappointment to reformers, because he cares first about the national political implications of tax policy and much less about the hard political work of real change in Louisiana government.
A structural deficit is not easily solved by shoving some easily disposable bit of dessert off the plate.
Lanny Keller is an editorial writer for The Advocate. His e-mail address is email@example.com.