Where do we go from here?

July 21
July 21, 2009
Louise Fanguy Buquet
July 23, 2009
July 21
July 21, 2009
Louise Fanguy Buquet
July 23, 2009

The Legislature has adjourned, but the dust from this session probably will not settle before the next year’s session begins.

Louisiana, like many other states, is at a critical crossroads. Two governors and two different Legislatures significantly overspent volatile oil and gas revenues in the two years prior to the current one.


That was the major cause of the budget crisis state government faced this year.


The problem is easy to identify. Simply go back to the decision made under the Blanco administration to fully fund the Rainy Day Trust Fund and allow skyrocketing oil and gas revenues to flow into the state general fund where they could be spent on recurring expenditures.

That is exactly what the Legislature did in Gov. Blanco’s last year and again in Gov. Jindal’s first year in office.


This year, the chickens came home to roost. Unfortunately, even more chickens will be looking for roosting space in the next few years.


Last Thursday, the head of the Congressional Budget Office told Congress that the federal budget is unsustainable going forward with current spending levels – much less the increases being proposed. Some well-credentialed fiscal guru needs to give our governor and Legislature the same message.

In addition to Louisiana’s declining revenue problem, the federal government has informed us that, due to a temporary upward blip in personal income, we will be paid $1 billion less in Medicaid money next year. Our state leaders are on their knees begging for mercy from that decision, but there is a strong likelihood that their pleas will go unanswered.


Compounding the problem is the fact that in two years, hundreds of millions in “stimulus” dollars will no longer be coming from Washington. The time to plan for that is now, not two years from now.

Another ominous sign on the horizon is the very negative attitude the Obama administration and the majority in Congress is showing toward the oil and gas industry.

The industry is facing a drastic increase in taxes and more restrictions on domestic exploration and production. If domestic oil and gas activity is curtailed by new federal laws and regulations, our state revenue picture will become even bleaker.

Gov. Jindal is first up at bat in addressing these problems since he must submit an executive budget proposal to the Legislature early next year. What the governor submits in his annual executive budget usually provides the basic blueprint for what comes out of the process.

Certainly, the governor can’t expect any increase in revenues coming from natural growth in the foreseeable future. That being the case, he will supply the early vision as to how state government must be reconfigured to match appropriate spending levels with real-world revenue projections. His executive budget should also clearly indicate what his spending priorities will be.

The executive and legislative branches should not wait for next year to begin reshaping the delivery of state services to match new revenue realities.

Close scrutiny should be given to state funding of local government services, consolidation of functions in post-secondary education, civil service reforms that would enhance state government’s ability to consolidate its workforce, and other spending reforms that would reduce the expense side of the state fiscal ledger.

It was fun to be governor or a legislator in the revenue-boom years after the hurricanes when recovery money was flowing and oil and gas prices were setting records.

The party is now over. It is time to clean up the excesses and make government work as best as possible with the revenues that are available. That is what families are doing all across Louisiana. Their elected leaders should follow suit.