By Robert Mann
Other than his perpetual presidential campaign in waiting, nothing has characterized Gov. Bobby Jindal’s six-and-a-half years as governor more than the state’s ongoing budget crises. And other than deep cuts to higher education and health care, nothing has characterized those budget crises more than Jindal’s addiction to one-time money to balance the budget.
Which reminds me of the December morning in 2010 when Timmy Teepell, then Gov. Jindal’s chief of staff, was kind enough to address my class at LSU. He was an engaging speaker, but what I remember most is his artwork.
This was in the middle of the recession and Louisiana, like most states, had severe revenue problems. Explaining Jindal’s approach to the budget, Teepell used a red dry-erase marker to sketch a crude U-shaped graph on the board. The first half of the line plunged, representing the state’s diminishing tax revenue. The other half of the graph ascended, which signified Teepell’s optimism about the future – that is, revenue collection he expected would rebound with an improving economy.
Midway through the graph, Teepell drew a straight line that partly smoothed out the deep trough. That represented the federal stimulus and one-time state dollars Jindal and legislators were using to the balance the state budget. That temporary, non-recurring money, Teepell said, was only a bridge to better times.
As we now know, Teepell’s bridge collapsed. The expected better times didn’t come quickly enough. As the recession gradually abated, revenues didn’t rebound to previous levels.
Of course, none of this is what Jindal and legislators envisioned in 2008 when they finished a process – begun by Gov. Kathleen Blanco and the previous Legislature – of cutting income taxes by about $600 million a year, much of which went to wealthier taxpayers. Jindal also presided over a $250 million annual business utility tax repeal. Most of those tax cuts took effect in 2009, which triggered another huge dip in state revenue.
Why didn’t revenues eventually rebound after the economy began improving? Well, because of tax cuts alone, we’re collecting $850 million less each year. And Louisiana’s budget is heavily dependent on regressive sales taxes, which economic studies indicate don’t respond quickly to economic growth.
Whatever the reasons, when revenues failed to rebound, Jindal and lawmakers continued to tap one-time money, to the point they’ll now consider no solution beyond spending temporary revenue and imposing deep budget cuts.
That non-recurring revenue, by the way, has been mostly acquired by selling state assets, misappropriating federal hurricane relief funds, staging an irresponsible tax amnesty program and draining every trust fund in sight.