Tyler Bridges’ Scathing Assault On Bobby Jindal’s Budget Performance In POLITICO

It’s unquestionably an attack on the governor from the left, and all but a primal scream for more taxes, but the freelance writer with long experience covering Louisiana politics published perhaps the most scathing indictment of Jindal’s fiscal record to date.

A sampling…

But here’s what Jindal doesn’t say: Louisiana’s budget is hemorrhaging red ink, and it’s getting worse. He inherited a $900 million surplus when he became governor seven years ago, and his administration’s own budget documents now show the state is facing deficits of more than $1 billion for as far as the eye can see. There are no easy solutions today because Jindal has increasingly balanced the budget by resorting to one-time fixes, depleting the state’s reserve funds and taking money meant for other purposes.

“There are all kinds of tricks in the budget,” said Greg Albrecht, the state legislature’s chief economist, a nonpartisan position. Meanwhile, the state’s unemployment rate has risen from 3.8 percent when Jindal took office, a point below the national average then, to 6.7 percent today—nearly a full point higher than today’s national average. Jindal omits these inconvenient facts when he bashes President Barack Obama and Washington for “bankrupting” the federal government and mismanaging the national economy.

And…

Reluctant to pay the political price to cut more and sticking by the pledge has put Jindal in a fiscal box. His solution: Rely increasingly on what Richardson, the LSU economist, calls “all sorts of gimmicks”—balancing the budget through one-time sales of state property, legal settlements with companies sued by the state, the elimination of vacant state jobs and a tax amnesty program. “Doing it for one year is not bad policy,” said Richardson. “But doing it for four or five years is not sustainable.”

Steve Winham, who served as the state’s budget director for Democratic and Republican governors, knocks Jindal for another patchwork scheme: taking money from state agencies or programs to plug the overall hole and, in the process, creating new and often more expensive problems. For example, the Jindal administration has taken about $7 million per year away from the state park maintenance fund. The result: a $21 million backlog in repair work for state parks. Winham also points to techniques he describes as shell games: A $25 payment to get an Animal Friendly license plate, for example, hasn’t gone to spay cats and dogs—as many people believe—but instead has provided a total of $30,000 for the budget. And then there are budget schemes that have yet to materialize. For the past two years, the Jindal administration said the state would collect about $15 million by selling the campus of Southeast Louisiana Hospital. The sale has yet to happen.

These tactics have failed to close the budget shortfall. Louisiana finished 2014 with an operating deficit of $167 million, said Richardson. “We just kind of muddle through every year,” Winham said. “But we’re finally hitting the wall. It’s sad.”

There isn’t anything particularly new in Bridges’ piece, at least not for politically-informed folks in Louisiana who know that the state’s budget has been out of balance for a long time and Jindal’s practice of raiding the various funds and using one-time money to balance the budget was eventually going to cause a problem.

On balance, it’s a fair assessment. While Jindal can say he has shrunk government in Louisiana, and Jindal can also say that while Louisiana’s economy has outperformed that of the country overall it’s difficult to uncork a true economic boom when the national economy is scraping along at a two percent growth rate or less, at the end of the day he simply has not addressed the myriad structural problems and inefficiencies in state government which have created the problem.

Bridges harps on Jindal’s no new taxes pledge to Americans for Tax Reform as the reason for the state’s fiscal conundrum, though, and that’s where he goes off the rails. Louisiana has Texas next door, where there is no state income tax and a far superior business climate – not just to Louisiana but anywhere else in the country. One of the positive things Jindal can point to as governor is that he’s managed to stabilize the mass exodus of Louisiana population and capital across the Sabine River. To just mindlessly hike taxes in order to pay for Louisiana’s welfare and regulatory state would only open the floodgates again. It’s not so much that Jindal made Grover Norquist a promise; there are real consequences to massive tax increases, and when you run off your productive citizens by charging them more money to breathe your air you’re not getting them or their tax dollars back.

Yes, there are tax breaks Louisiana has instituted in order to compete with Texas, and yes, some of those tax breaks could be done away with. For example, perhaps the worst example of corporate welfare extant in Louisiana is the $200 million in tax credits for the solar industry, less than half of which comes back in real benefits to our public fisc. But on the whole, those tax breaks were issued in order to create the environment of job creation in Louisiana and to stop the outmigration of our citizens; without them, the 20-year bleed-out of Louisiana’s people and capital would continue.

Moreover, the state isn’t starved for revenue. It has enough tax dollars to survive on a sustainable level of government. The problem is that Louisiana has an unsustainable level of government. That was the case before Jindal took office, it’s been the case while he’s played every flim-flam game imaginable to present the facade of a balanced budget and it’s certainly not the case now that the cows are coming home.

To get Louisiana to a sustainable level of government is going to involve the kind of hands-on management Jindal has never had the stomach for. It’s going to involve a level of honest communication with the people of Louisiana that neither Jindal nor his team have shown the will or capacity for. And it’s going to involve a massive amount of upheaval in the state’s public sector that strikes fear in the hearts of all its politicians, even though the current slow-motion readjustments probably imply just as much pain as a permanent fix to the problem would.

The main reason the state can’t balance its budget is too much of that budget is protected by an outdated and idiotic constitution which squirrels state revenues away into dedicated funds, meaning that when budget woes hit it’s impossible to spread the pain out across the board. Rather than working to alleviate that problem, the mediocrities in Louisiana’s legislature each year make it worse by voting their pet causes onto the ballot for constitutional protection, and then Louisiana’s voters buy into the idea that because the state is so bad at budgeting we need to insure those pet causes can’t be cut.

And Jindal never speaks out against the process of making Louisiana’s fisc less flexible every year. He’ll sweep surpluses out of the pet funds, which has subjected him to criticism that is largely unwarranted, but that doesn’t solve the long-term problem. What he has needed to do for a long time, and has never done, is demand the discretion and flexibility to make the smartest possible budget decisions and to undedicate those funds which are generating surpluses while the general fund is in deficit. And if he wasn’t able to win that argument, Jindal needed to begin the kinds of draconian cuts the state has to have and couch them as his only option given the flawed fiscal structure he was left with and its relationship to the current realities.

This is politically perilous, but the governor has to trust that the public will understand the need for budget reform. He has not done so, and the reform has not happened. Now it’s largely too late, and those painful structural changes – mass layoffs at state agencies, closure of low-priority state programs and institutions and so on – are upon us.

Those are going to largely destroy any chance Jindal would have of winning the Republican nomination in 2016, and they might damage his reputation as a policy wonk capable of a Cabinet post, something he is otherwise eminently qualified to do. But while Jindal’s treatment at Bridges’ hands in POLITICO might not be to his liking, it isn’t inaccurate.

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