Louisiana stands at the brink of economic disaster
Already, the state of Louisiana had gutted university spending and depleted its rainy-day funds. It had cut 30,000 employees and furloughed others. It had slashed the number of child services staffers, including those devoted to foster family recruitment, and young abuse victims for the first time were spending nights at government offices.
The nations second-poorest state still needed nearly $3 billion almost $650 per person just to maintain its regular services over the next 16 months. Edwards gave the states lawmakers three weeks to figure out a solution, a period that expires March 9 with no clear answer in reach.
Doomsday, said Marketa Garner Walters, the head of Louisianas Department of Children and Family Services. If the state cant raise any new revenue, her
agencys budget, like several others, will be
slashed 60 percent.
At that level, she said in an interview, the agency is unsustainable.
Many of the states economic analysts say a structural budget deficit emerged and then grew under former governor Bobby Jindal, who, during his eight years in office, reduced the states revenue by offering tax breaks to the middle class and wealthy. He also created new subsidies aimed at luring and keeping businesses. Those policies, state data show, didnt deliver the desired economic growth. This year,
Louisiana has doled out $210 million more to corporations in the form of credits and subsidies than it has collected from them in taxes.
Initially, Jindal had been able to cut taxes because Louisiana was buoyed by billions in federal money, an influx to help with the recovery from Hurricane Katrina, which struck in 2005. But as that money ran dry, Jindal said he would veto any bills that would push taxes back to where they had been. Instead, to plug budget gaps, Jindal relied not just on cuts but also on controversial, one-off fundraising methods. The state sold off assets, including parking lots and farmland. It cleaned out money from hundreds of trust funds among them, one intended to build reefs for marine wildlife. It pieced together money from legal settlements.
The math is daunting: For the fiscal year that ends June 30, Louisiana is facing a $940 million deficit, roughly one-eighth of what the state typically doles out from its general fund in a year. For 2016-2017, which begins July 1, the gap is
$2 billion.
Jindal had helped the state put off its day of reckoning in a way that mirrored a Ponzi scheme.
This was years of mismanagement by a governor who was more concerned about satisfying a national audience in a presidential race,
Louisiana has cut funding for higher education by 44 percent, the sharpest pullback in the nation; Southern has seen its funding cut 49 percent
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