Our Views: State budget woes persist

In the aftermath of the global recession, Gov. Bobby Jindal and state lawmakers have cobbled together an increasingly tenuous series of expedients to balance the state budget. Large budget cuts to health care and higher education have been the order of the day, along with the use of one-time money to keep the state budget in the black. Policymakers are hoping for brighter days ahead for the state budget as the global economy gradually rebounds.

But a national panel studying challenges for state budgets across the country has concluded that states will continue to face daunting fiscal challenges, even if the economy improves. In addressing those challenges, state leaders are going to need more than accounting gimmicks and a budget knife to keep state finances solvent.

Those are the main lessons from a report issued by the nonpartisan State Budget Crisis Task Force, which included a number of nationally noted fiscal experts, including Paul Volcker, a former chairman of the Federal Reserve.

The panel examined state budgets in six large states, but the findings throw light on problems shared by many state governments nationwide. The panel’s report focused in California, Illinois, New Jersey, New York, Texas and Virginia. Many of the themes explored in the report will be familiar to those who have followed state budget policies here in Louisiana.

Many states, including Louisiana, face multimillion-dollar headaches in financing Medicaid, a government program that funds medical services for the poor. Louisiana is also among many states with large unfunded liabilities for state retirees. Louisiana and many other states face problems in funding maintenance and improvement of state roads and bridges because gasoline tax revenues have not kept up with infrastructure needs.

We commend Jindal for proposing changes in the state retirement system that, while not perfect, did advance a useful discussion about the problem posed by the state’s large financial liability to state retirees. Thinking beyond the next election cycle, unfortunately, has been the exception rather than the rule at the State Capitol. The state’s budget problems, while exacerbated by the recession, are due in large part to structural challenges and tax policies that existed before the economic downturn. Those problems will persist after the national economy improves.

So far, most of the proposed solutions we’ve seen among state leaders are Band-aids, not cures.

Comments

1) Comment by 8.3 - 26/07/2012

What business did Jindal run to provide a foundational successful business model? 300 jobs were announced yesterday, that might make up for the 300 lost when Globalstar collapsed on the state's dime.

2) Comment by DMJ - 26/07/2012

Tradewins, you have a dark soul, brother. Surely, you don't really have such a negative dispostion. If I was as grim as you, I'd probably off myself. Cheer up brother. Try giving people the benefit of the doubt instead of simply assuming everyone's out to screw each other. That's not the world I know.

3) Comment by tradewinns - 26/07/2012

if your income drops, your expendatures must also drop. what is so hard to understand about that? if you want health care and education to remain at their current level, then other segments must decline. i'm all for removing welfare in all it's forms from the budget. those receiving it would have to adjust to the new circumstances. if you want to include "corporate welfare". fine, they will have to pay more in taxes. however that would be offset by the decline in state expenses currently incured by the useless. they would have to relocate to another state or go to work, whichever they want. there are a few, a very few, who are either mentally or physically handicapped to the point they can not help themselves, who we could all help, if we so choose. what is ya'll's plan for the budget deficit? increased taxes with no decrease in spending? this is not lala land, it's real life.

4) Comment by DMJ - 26/07/2012

This is starve-the-beast in action. Of course, the beast is education and health care, turns out. You know what's ironic...if Jindal runs for V.P. and validates the charges that he cares not about Louisiana but about his own political ambitions, thus betraying the citizens of Louisiana, Louisiana will STILL vote Republican....probably moreso than in 2008. Go figure...

5) Comment by spqr - 26/07/2012

"lovemykids", I've been waiting for decades for your hopes to come to fruition. I've given up. And so have the legions of skilled and educated who have left the state and will never return. Our legislators can't speak English well (hillbillies, really). We can't expect them to lead.

6) Comment by lovemykids - 26/07/2012

LA's downhill slide is increasing in speed. Maybe, one day, we will have a state leader who is not willing to sacrifice the people of LA for political ambitions. Maybe, one day, we will have a legislature with backbone.