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Story Archives: No time for the weak
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No time for the weak
The $250 million in mid-year budget cuts that Gov. Bobby Jindal ordered last week were a precursor of what we can expect in Louisiana on the budgetary front in 2010 and beyond.
While we suspect some people cringed at the news that Jindal ordered a roll back in spending to balance the state's checkbook amid a free-fall in tax collections, we viewed the governor's move a bit differently. In other words, we applaud Jindal for governing like a conservative, which is what candidate for governor Jindal pledged to do if the people elected him.
Instead of announcing that he would call on the Legislature to raise taxes or entertain other revenue "enhancers," Jindal declared prior to Christmas that every state agency would scale back its spending to aid the state's efforts to maintain a balanced budget for the remainder of the 2009-2010 fiscal year, which ends June 30, 2010. Unfortunately, higher education and health care will bear the brunt of the cuts. That's the way it has to be since Louisiana and her people decided long ago that higher education and health care should be left to fend for themselves in times of tight money.
Two weeks ago, the state Revenue Estimating Conference reported that sales and corporate tax collections were lagging, or not generating as much money as the REC—and some state legislators—thought they would gin up over the course of the 2009-2010 fiscal year. That should not come as a surprise.
Since December 2007 (according to economists), the U.S. economy has been in the midst of an economic recession. Louisiana's economy has suffered, too, though not as badly as most states. People have lost their jobs, and many of the people who still have jobs have not spent as much money as of late as they spent a year or two ago. Accordingly, sales tax collections are down because consumer spending is down.
Meanwhile, many Louisiana businesses engage in commerce with businesses in other regions of the country. Since other regions of the country (and world) are suffering economically, Louisiana businesses have suffered as well. The suffering in Louisiana on the corporate front means less corporate taxes have been paid to the state. That's a simplistic explanation of the corporate climate in Louisiana as it relates to corporate tax payments, but it's an accurate one.
In the coming months, we will hear from people from all walks of life in Louisiana who will enlighten us of how negatively they were impacted by Jindal's order to trim state spending by about $250 million out of a more than $30 billion budget. The sky is falling is what we will be told.
The bellyaching, though, won't be as nearly as loud as the hue and cry we'll hear if what we're told is true about the state's outlook budget-wise for the 2010-2011 fiscal year and in the year thereafter. Remember, some state lawmakers and other officials have warned us to prepare for a roughly $1 billion budget shortfall in the 2010-2011 fiscal year while another $1 billion-$2 billion budget shortfall awaits us in the 2011-2012 fiscal year.
If that's the case, you can rest assured that a movement will surface to raise taxes in Louisiana to maintain state services at a level comparable to what they are today, or comparable to what they were before Jindal trimmed $250 million from the state's bottom line.
We expect Jindal to resist any and all efforts to raise taxes to feed that beast we call government.
In the meantime, we would do well to visit memory lane.
Two years ago, Louisiana's treasury was overflowing with what we were told was a $1 billion surplus and then some. Quite frankly, we've lost track with how many budget surpluses the state posted and how much those surpluses totaled since hurricanes Katrina and Rita stirred up the economy here.
We know, though, that those surplus monies were spent by the Legislature. Those expenditures entailed paying for the growth of government.
Now the people are going to pay a price for all of the love they were shown in the not-too-distant past.
Let's hope they have the stomach for it. |
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