If your car breaks down every Monday, eventually you’re going to do one of two things. You’re going to get a new mechanic or a new car.
Louisiana’s state budget is a lot like a car that breaks down on a regular basis. For some time now, every December or January, a huge shortfall emerges that has to be fixed. If you have a kid on TOPS, then you’re already suffering the consequences of the state’s inability to manage its money. You just wrote a fat check for your kid’s tuition because the state came up short. Merry Christmas to you.
So it’s no huge surprise the state has yet another deficit – this time $600 million. It’s obvious that we need to make changes, starting with eliminating the hypocrisy from the state budgeting process.
The real question is how in the world does the state not have enough money? Taxes are sky high after the largest tax increase in Louisiana’s history. The state’s not really paying for TOPS scholarships; parents are. And, in November, state revenue was up 27% over last year.
A couple of things are going on.
First, the state isn’t hitting the mark on how much money we can expect to receive each year. Since the state budget is built on those projections, it’s costly when we get it wrong.
Basically, we’re being too optimistic about how much money the state is going to bring in. We’re being too optimistic year after year after year. You’d think we’d get the idea eventually that we’re not going to find an oil field underneath the State Capitol every other week – or wherever it is we think we’re going to get all this money.
Second, the state spends money like crazy. New cars are purchased. Pay raises are given – not to the worker bees, mind you, but to the top brass. More people are added to Medicaid.
The truth is that the state is simply not living within its means. It is spending more than it takes in and letting our taxpayers handle the consequences.
As state treasurer, I like to look at numbers. Numbers don’t lie. So I pulled the budget for the state’s Division of Administration. The Division of Administration manages the daily operations of state government, operates as the state’s accountant and works directly for the Governor.
The Division’s budget was $147 million in 2005. It now stands at $395 million. That’s a $248 million, or 169% increase, over 12 years. That’s a 14% increase per year on average. Has your income gone up 14% a year each year for the last 12 years? (In case you are wondering, the Department of the Treasury’s budget increased only 2.6% annually over the same period of time).
No one’s really reducing their spending at the State Capitol except for a dip or two from time to time. Meanwhile, the Pew Research Center tells us that real wages (income with inflation factored in) have largely been flat for 20 years.
Instead, the state’s relying on foolish tricks and gimmicks to limp along. The state cuts higher education to the bone but allows health care costs to balloon. The Legislature gives lip service to reducing consulting contracts but refuses to pass a bill that would allow the Legislature to reject them. More often than not, the top brass get pay raises while forcing our rank-and-file state workers to get by with the same paycheck every year.
The Division of Administration, which handles the budget for the Governor, can’t even cut its own budget.
We can do better. We must do better. Our taxpayers deserve it. We can’t keep driving a car that breaks down every Monday.