“Facts are stubborn, but statistics are more pliable.”
Kimberly Robinson, the Secretary of the Louisiana Department of Revenue, made a speech yesterday at the Baton Rouge Rotary Club in which she regurgitated a standard talking point of the Edwards Administration. She alleged that state spending has declined a billion dollars since 2008, intimating that state spending under the Edwards administration is not much higher as most people believe, but has somehow declined since he took over.
Statistics are indeed pliable and these Administration talking points are truly a misleading use of statistics as they are based upon some false assumptions. More specifically, by using 2007-08 as a baseline of spending she dramatically distorts the conclusions. Due to the post Hurricane Katrina windfall, the budget cycle 2007-08 fell squarely in the middle of the most astronomically high revenue/spending period in Louisiana history. In fact, with the exception of Governor Edwards’ current budget cycle, 2007-08 was THE highest spending year in our history. Any analysis using the highest spending period in history as the baseline to measure the trend in current spending is patently wrong.
Compounding the misleading statement, the Secretary failed to note that post-Katrina spending wound down dramatically after 2008, at least until Governor Edwards took office.
In order to fairly analyze current spending trends there are two logical ways available to us. First and simplest is a comparison of current spending to the spending in the last years of Governor Jindal’s term. Inflation has been limited in the few years since and the Katrina windfall has long since subsided so this method should make for a balanced comparison. Using published House Fiscal office data, in 2007-08 we spent $27.8 billion, in Jindal’s last budget 2015-16 we spent $23.1 billion, and in the current budget 2017-18 (subject to final adjustments) we are spending $28.3 billion (again the highest in our history). That is an increase of about $5 billion from the last Jindal budget and about $500 million above the previous high, that infamous cycle 2007-08 used by the Secretary.
In order to compare current spending to a long term trend, a stable period prior to Katrina must be selected and the spending for that period extrapolated to current by the multiplication of the CPI growth. From House Fiscal Office sources spending in the 2004-05 pre-Katrina period was $17.2 billion. The compounded CPI multiplier between then and now is 29.58% or $100 in January 2005 would be $129.58 in January 2018. Therefore no government growth, pre-Katrina spending extrapolated to the current budget cycle would equate to $22.36 billion.
Now since spending in the 2017-18 period is $28.3 billion, we are spending about $6 billion more per year than if we had maintained spending at the pre-Katrina level. In other words government has grown by that amount.
I have no way of ascertaining how the Secretary reached a conclusion that spending is down a billion dollars but my calculations of spending yield wholly different results. So if you have managed to make it to this point here is a summary of my analysis:
2004-05 (extrapolated) to current – up $6 billion (no growth
pre-Katrina steady state budget)
2007-08 to current – up $500 million (previous post Katrina
2015-16 to current – up $5 billion (Jindal’s last year)
As Mark Twain said, statistics are indeed pliable, but I can see no basis for any conclusion other than we have grown government substantially since Governor Edwards took over.