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The latest U.S. Census figures indicate that despite all the grandiose talk by Bobby Jindal about how well the economy in Louisiana compares to the other states it is simply a lie.

The unasked and unanswered question is whether the state’s current economy can maintain the level of business activity plus the cost of state and local government services.

One doesn’t have to be a trained economist to know the answer.  It is Economics 101. We have more demand for services than the economy can generate to pay for them.

LA is no longer merely facing a $1.6 Billion “fiscal cliff,” we are facing a “fiscal train wreck” of historic proportions.  That “cliff” is just the first step.  After going over the cliff, the stop at the bottom is the killer.

How did it happen?

The reason for the impending train wreck can be traced back to a single decision by Jindal.   This summer he convinced (not much effort considering the leges collective I.Q.) the leges into spending $2.8 Billion of non-recurring (one-time) revenues in the current operating budget.

Before becoming governor, at every opportunity, he railed against the use of one-time revenues to fund on-going expenses.

Such a concept does not require the level of someone of Jindal’s alleged intellect.  It’s common sense.

When Jindal decided to use the one-time revenues, no thought, much less a plan, was given to how those government functions would be funded beyond June 30, 2011.   He signed the state’s fiscal death warrant.

Only a handful of leges along with State Treasurer John Kennedy opposed the use of one-time money.

The “fiscal cliff” is now becoming a train wreck of epic proportions.

Sacrifice not forthcoming

The problem can no longer be solved by the state elected officials and public employees.  They either don’t have the knowledge, the tools or the desire to do what needs to be done.

Structural changes needed to lessen (can’t avoid the train wreck) the impact of this fiscal catastrophe would require these public servants to sacrifice themselves.

The public servants will rationalize that they cannot let down those who they service. It sounds good, but man’s highest motivator is saving one’s self (own job).

Sacrifice by public servants simply isn’t going to happen.

Solutions to the fiscal catastrophe are beyond merely cutting some state employees, selling off unneeded physical assets.   Decisions have to be made to simply eliminate state and local programs, cold turkey.    No phase out; elimination.

My prediction is that there will be a “fiscal train wreck” (Beyond the level of the mere $1.6 Billion “cliff.) within one year.

Following the wreck, the focus of the government “fiscal first responders” will be to first triage the public sector in order to save as much of it as can be saved. The public servants lives and livelihood depend on it.

Survival of fittest

The private sector will be left to fend for its own.

For those of us in the private sector it will be a manner of survival of the fittest.   Those who are ambitious and those with the necessary wherewithal will simply leave the state.

It’s not a long journey to Texas or Georgia which for whatever reasons offer an opportunity for hard-working individuals and businesses to survive.

Buck stops here

The single individual for creating the catastrophic fiscal situation in Louisiana is Bobby Jindal.

To date, nobody has confronted Jindal with the tough questions and forced him to answer them. It is not too late to ask Bobby Jindal the tough questions.

Prediction

We will soon learn that while the fiscal train slowed slightly while Bobby fed the train’s engine with the cargo onboard, Bobby quietly jumped off the train in Washington D.C.

I welcome all comments on how Bobby specifically plans to address the train wreck.

Unless it is a proposal for a balanced operating budget using only recurring revenue the train wreck will happen.

The secret that nobody wants to discuss or admit is that Jindal and his minions simply don’t have the ability to craft such a budget that will save the private sector.

Unless you still believe in the tooth fairy, you should consider reserving a U-Haul trailer.

C.B.
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1 CB 10:06 am

Merely saying one is “against taxes” (Bobby Jindal and most leges) yet failing to push the restructuring/down-sizing of government to a level at which the working people (vast majority) and the economy of our state can afford to sustain is not being a “conservative” in my book.

Recently, Higher Education has become the “stalking horse” for higher taxes in Louisiana.

History indicates the more college tuition is raised the fewer existing state dollars will flow into higher education.  The existing state dollars supplanted by increased tuition are used to fund lesser priorities in the state budget.

Case in point

For years I’ve said: “Education is the number one priority in Louisiana —– right after everything else.”    Here’s the evidence:

In February of this year, Bobby Jindal presented to the lege the State Operating Budget for the current fiscal year. The total was $24.2 BILLION. The budget contained NO additional CUTS to higher education.

When the leges finished going over the State Budget, by June, it had ballooned-up to $26.9 BILLION; plus it contained significant CUTS to higher education.

In other words, the leges added $2.7 BILLION to the budget but reduced funding to Higher Education.  The result of the cuts to Higher Ed, intended or unintended, was to force the colleges to impose higher tuition and fee costs via the authority given (LA Grad Act) them by Jindal and the leges.

Stelly Tax the answer?

Many believe re-instating the Stelly Tax (increase in state Personal Income Tax) is the answer to Higher Education’s fiscal problems.  To those I ask: What is to keep the leges from re-imposing the $300 Million Stelly Tax and still reducing Higher Education funding by a like amount?

There is nothing, legally, to stop them from doing exactly what I suggest and that which they have already done.

“Shell game”

The governor and the leges have found a clever way to avoid voting directly for higher taxes. The leges’ constitutional taxing authority has been delegated to the multiple boards of higher education which in some instances have delegated it to the students to self-impose fees on themselves merely to maintain the status quo.

While they should be intelligent and educated enough to understand how they are being used, don’t expect the highly-paid executives whose job it is to oversee Higher Education to buck this trend.  Doing so would be tantamount to admitting that they haven’t done their jobs properly and likely can’t.

The Higher Ed execs are the problem, not the solution.

One wonders if the college students and their parents who pay tuition understand how this “shell game” is being played.

Bottom-line: Would you hire a manager for your business that every time your profits dropped suggested the solution was to increase prices?

C.B.

1 CB 8:00 am