Mining royalties decrease, fiscal year 2005-2016: To help offset the loss in revenue resulting from falling oil prices, Louisiana gave tax breaks to energy companies. Graphic: Stephanie Stamm / Washington Post

By Chico Harlan
4 March 2016

BATON ROUGE, Louisiana (Washington Post) – 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.

And then, the state’s new governor, John Bel Edwards (D), came on TV and said the worst was yet to come.

Edwards, in a prime-time address on Feb. 11, said he’d learned of “devastating facts” about the extent of the state’s budget shortfall and said that Louisiana was plunging into a “historic fiscal crisis.” Despite all the cuts of the previous years, the nation’s 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 state’s lawmakers three weeks to figure out a solution, a period that expires March 9 with no clear answer in reach.

Louisiana stands at the brink of economic disaster. Without sharp and painful tax increases in the coming weeks, the government will cease to offer many of its vital services, including education opportunities and certain programs for the needy. A few universities will shut down and declare bankruptcy. Graduations will be canceled. Students will lose scholarships. Select hospitals will close. Patients will lose funding for treatment of disabilities. Some reports of child abuse will go uninvestigated.

“Doomsday,” said Marketa Garner Walters, the head of Louisiana’s Department of Children and Family Services. If the state can’t raise any new revenue, her agency’s budget, like several others, will be slashed 60 percent.

“At that level,” she said in an interview, “the agency is unsustainable.” […]

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.

“This was years of mismanagement by a governor who was more concerned about satisfying a national audience in a presidential race,” said Jay Dardenne (R), the lieutenant governor under Jindal and now the state’s commissioner of administration. Dardenne said Jindal had helped the state put off its day of reckoning in a way that mirrored a “Ponzi scheme.” [more]

Battered by drop in oil prices and Jindal’s fiscal policies, Louisiana falls into budget crisis

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