Budget shortfalls have addicted Bobby Jindal to gimmicks, one-time money

Gov. Bobby Jindal in a recent video by the Republican Governors Association.

Gov. Bobby Jindal from a video by the Republican Governors Association.

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.

If only.

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.

Continue reading at NOLA.com

About these ads

5 thoughts on “Budget shortfalls have addicted Bobby Jindal to gimmicks, one-time money

  1. In 1988 Louisiana had a billion dollar projected budget deficit AND no money in the state treasury to pay our bills on a timely basis – we literally had to hold bills until we had the cash flow to pay them. Is it possible we are stupid enough to reach that ridiculous point again? It would certainly seem so.

    We can only hope our new governor has sufficient determination to do what is necessary to fix things, but if history is any predictor, the fix will be temporary. I’ve not mentioned them because history also tells us we certainly can’t expect our legislature to stand up on its collective hind legs and start to do anything about it now or in the future despite clearly having the power to do so.

  2. Another great piece. John Bel

    Sent from my iPhone

  3. The sad state Louisiana is in We seem to be addicted to Money COCANE$ $ $ .

  4. Let’s hope that the next administration has the intestinal fortitude to curb the appetite of state government and rein in spending, so that budgetary tricks aren’t needed to fund the basic obligations of the state. Let’s also hope that they have the intestinal fortitude to fund ONLY the basic obligations of the state. Bloat got us in this mess. It will take belt-tightening to get us out.

Comments are closed.