forgotston.com

It’s difficult to determine whether the recent revelation about the state deficits and shortfalls is the result of our public officials being asleep at the wheel or benign neglect.

The state has invested millions in sophisticated computers. Both the administration and the lege have economists on their payrolls. There are dozens of economists working for the taxpayers at the various state colleges and universities.  Yet, those we entrust to manage the state’s finances seem surprised to learn that they have spent more money than the state will take in.

Surprise?

Surprise! Surprise! The revenues from oil and gas are dropping. Anyone who drives a car has known this for months.

I suspect many of the leges have been making cutbacks in their own businesses and family budgets. Why didn’t they speak up and begin the cutbacks in the state budget sooner?

If those of us in the private sector ran our businesses and family budgets like those we entrust to run our state we would be bankrupt.

However, our public officials waited until an “official” pronouncement by the Revenue Estimating Conference to make reductions in the spending.

Why wait?

Jindal says he is developing a plan for reducing the budget.  Why doesn’t he already have one ready to go? In his travels all over America in the last few months didn’t he realize that the other states were already facing the reality of a declining economy?  Didn’t he realize that the national economic problems would impact his own state?

The longer Jindal waits to implements the reductions in expenditures this fiscal year, the deeper the cuts will be.

Culprit?

Exercising a little restraint this past summer in funding NGOs would mean fewer cuts now to healthcare and higher education. Apparently, the NGOs will be fully funded. Remember that when a state reduction affects you.

The culprit for the current problem is not falling oil and gas prices.  The real culprits are our leges and governor.

None is so blind as he who would not see.

C.B.

1 CB 7:25 am

Last Friday there was a report ( here) about a potential problem for building a new LSU teaching hospital in New Orleans. The state needs to borrow (via bonds) approximately $400 Million to provide the remainder of the cost of the proposed $1.2 Billion hospital.

According to the reports, Louisiana is nearing the state’s constitutionally-mandated “debt limit.” The state may only be able to borrow a maximum of $200 Million for the project.

The debt limit is a common sense, fiscally-prudent, mandate to keep our common-sense-challenged and fiscally-imprudent leges in line. It keeps them from borrowing more than the state can afford to re-pay based on the state’s annual revenue stream.

If the mortgage lenders and politicians in D.C. had exercised such common sense and fiscal prudence in lending practices to home buyers, the country might not be experiencing the current financial crisis or to this extent.

But, I digress.

IF (and that’s a big “if”) Bobby Jindal, the leges and bond attorneys cannot find a way around (a loophole) the debt limit there’s a simple explanation for why the money will not be available for a vital project.

One need only look to the projects for which the state has incurred debt.  The particular culprit, in this case, is the debt incurred by the state on behalf of local governments for purely local projects.  The local debt underwritten by the state currently totals approximately $1 BILLION. ( See list here.)

But for, the state debt incurred on behalf of the locals, the state’s bonding capacity would be $1.2 BILLION below the debt “ceiling.”

Thanks to lack of fiscal foresight and common sense by those we entrust to manage our state, the chickens are home at roost.

C.B.

1 CB 7:08 am

I don’t know whether the story in Saturday’s Baton Rouge paper about the LA Economic Development department hiring a company out of Chicago to help LA get an automotive plant is silly or sad. (Story here.) Our ethically-challenged head of the LED, Stephen Moret, is spending over $600,000 of OUR tax dollars with a consulting company in Chicago.

For the foreseeable future, I can’t think of an industry more like NOT to build a manufacturing facility than the auto industry and its suppliers.

Instead of exporting our dollars at a time when the state is allegedly facing a $1.3 BILLION shortfall, it might be better spent on developing a plan in LA to reduce business taxes for all businesses.

What’s next on Moret’s to-do list? A tanning plant to supply buggy whip factories?  At least we produce animal hides in Louisiana.

C.B.

1 CB 6:55 am