Political Horizons: Teetering budgets

Gov. Bobby Jindal, like Michael Dukakis before him, bases his bid for the nation’s highest office on being a governor whose technocratic expertise led his state to economic miracles.

Like the Massachusetts governor from the ’70s and ’80s, Jindal is driving a tank full of articles around to national publications that comment on how to build a strong economy. For instance, Jindal celebrated Friday’s 70th anniversary of the D-Day landing at Normandy with an essay in The Daily Signal slamming France’s economic policies.

Jindal points to France’s 11 percent unemployment. “France’s economy desperately needs structural reforms,” Jindal opined.

Paul Krugman, the Nobel Prize-winning economist, wrote in The New York Times on May 25 that much of the French unemployment, indeed, is structurally caused. French young people, rather than slinging burgers and selling drinks to pay their way through college, receive government aid to complete their education. But French adults in their prime working years — aged 25 to 54, the ones with families and mortgages — “are substantially more likely to have jobs than their American counterparts,” Krugman wrote.

Those facts are overlooked as a growing number of U.S. conservatives pile on France to bolster their “reverse Robin Hoodism” theory that giving to the rich leads to employment for the poor. Jindal’s Workforce Commission reported on May 23 that Louisiana’s unemployment rate was 4.3 percent in April.

Still, several budget experts report that Jindal’s budgetary infrastructure is teetering.

After years of dealing with revenue shortfalls, legislators last week overwhelmingly approved a state budget that projected spending $24.6 billion for the fiscal year starting July 1 on government services, including merit pay increases for some state workers and more money for higher education.

“We’ve seen a lot of drama and frustration in recent years. Don’t mistake the quiet this time as good budget policy,” said Robert Travis Scott, head of the Public Affairs Research Council of Louisiana.

Scott tempers his warning with compliments about some structural changes to the Louisiana budget. For instance, Jindal stopped using the practice of laundering windfall dollars, like from lawsuit settlements, to pay for ongoing expenses, such as salaries, thereby skirting the law that forbids budgeting one-time money for recurring expenses.

“The fact that they didn’t do it is very significant,” Scott said.

Still, Scott says, echoing others, the state budget makers have relied for years and continue to count on schemes to generate cash, such as tax amnesty, which then ends up paying expenses in the operating budget.

“Overall, we’re living on revenue that we contrive and borrowing from the future,” Scott said. “It’s not good fiscal policy.”

State Rep. John Bel Edwards, D-Amite, who heads the House Democratic Caucus and plans to run for governor next year, says that when legislators convene on April 13, 2015, they will have to find an estimated $950 million that is in this year’s budget but won’t be available for next year’s budget. That doesn’t count for the expected increased costs for all sorts of expenses like health insurance and meals for the elderly, so the amount could end up being $1.2 billion or more.

“We didn’t deal with many of our most pressing issues,” Edwards said.

Conservative budget guru Brett Geymann doesn’t disagree.

State Rep. Geymann, R-Lake Charles, said his House colleagues talked a lot about the impending $1 billion deficit. Each party caucus met with budget experts and heard their projections. But there was no collective will to do any heavy lifting, so legislators, instead, left the budget for Jindal to figure out.

“I don’t know why we don’t address it, other than it’s probably going to be painful. We tend to want to put those things off and hope it gets better,” Geymann said.

It won’t. Next year, it will be worse.

Before legislators head into elections, they first will have to vote on a state budget that Jindal builds and could very well have a significant number of cuts or tax increases. The administration has shaken those piggy banks and found a lot of them empty.

“It’s going to be harder to do all the gimmicks that in the past we’ve done,” Geymann said. “I don’t know what the answer is going to be other than we find some way to roll it into the next governor.”

Mark Ballard is editor of The Advocate Capitol news bureau. His email address is mballard@theadvocate.com.