A byproduct of economic weakness manifests itself in the revenues that are available to state and local governments. In NOLA, declining populations driven by a non-growth economy have resulted in demands by government to raise fees on those citizens remaining. At the state level, while revenues look solid this year, future projections demonstrate deficits going forward into the 2030s.

Louisiana is in good shape financially as work is underway to craft a state spending plan for next fiscal year, but Jan Moeller with Invest in Louisiana warns the state could see budget deficits in future years. Moeller says the reason is simple.

“One reason is that state revenues have plateaued and are actually starting to decrease a little bit. And the state’s expenses are starting to increase,” Moeller said.

Moeller says state revenues peaked in 2024 and are slowly going down, and projected costs of running state government are going up.

The economy matters more than just about anything in government.

In lieu of the constant drumbeat to address the wages of poverty, proactive steps to attract and cultivate productive citizens, citizens that pay taxes and don’t just absorb taxes, must be the focus of state and local leaders.

I know that that such a premise violates the century old “Louisiana Way”, but until we abandon the belief in a chicken in every pot, we will always come up short, and we will always be imposed upon by demands for more taxes/fees to support our own version of the welfare state.

As we watch the fight over the shrinking pie of government resources, we must remember that these squabbles find their basis in state and local economies that don’t create sufficient revenues that politicians, responding to people who have become accustomed to government dependency, want to spend.

The path forward will be one of two potential outcomes, bigger slices for all from a growing pie (growth}, or ever smaller slices from a shrinking pie (reduced government services coupled with demands for more taxes and fees).