Lawmakers should pare back spending

Published 12:00 am Sunday, January 17, 2016

Most Americans can relate to the State of Louisiana’s crushing debt burden.

Estimates indicate the state will need to find a way to close a more than $700 million budget shortfall before June, when the current fiscal year ends.

That’s the short-term bad news.

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The long-term picture is even bleaker. Next year’s budget shortage may wind up reaching up to $1.9 billion, state experts estimate.

Wow. That makes the City of Natchez’s annual payday loan habit of borrowing a few hundred thousand bucks to get the city through the lean end-of-the-year times seem like chicken feed.

Louisiana lawmakers will be squeezing, cutting, raising and praying that they can make things balance in the coming weeks.

As one lawmaker said last week, there isn’t a simple fix.

“Just turning down the thermostat isn’t going to get us there,” said Rep. Greg Miller, R-Norco.

As much as they hate to admit it, most lawmakers seem resigned to the fact that the ultimate solution is going to require more than just a big of belt tightening.

Significant cuts to state spending programs are likely. But cutting up to nearly $2 billion out of next year’s budget isn’t likely to be easy.

The financial solution is likely to require work at both ends of the state’s financial candle. Expenses must be cut, but likely revenue is also going to need to be generated in the form of tax increases.

A few years ago the state opted to lower income taxes that had been increased as part of the Stelly Plan from the early 2000s. The gimmick then was that in exchange for removing sales tax on groceries and household utilities, higher income taxes would offset the difference.

A few years after it was enacted, state leaders unraveled the plan by lowering the income tax rates, but they never added back the sales tax on groceries.

Key though was that spending wasn’t reduced.

The spending kept going and going.

Add in the recent, precipitous drop in oil prices — each drop in prices per barrel costs the state millions in tax revenue — and it’s a recipe for financial disaster.

One of the most irritating state spending challenges for me is the extremely lofty amount of dollars pumped into the state’s public retirement system.

At last report, Louisiana’s state retirement plan was only funded at approximately 62 percent, meaning it has far more future liabilities than it currently has assets to cover.

Last year, for each person in the plan, approximately, one-third of their annual salary was pumped into the plan to fund their cushy state retirement plans.

Many state plans are in similar shape and must be addressed either by reducing payouts or having the state chunk piles of cash into the plans.

If you want to see a more tangible example of state spending that isn’t terribly needed, consider that the state has pumped millions — approximately $11 million by one count — into Vidalia’s port project.

Does Vidalia actually need a port? That depends upon whom you ask, but certainly it’s not a dire need since the Natchez-Adams Port just across the river is busy, but doesn’t appear to be turning away business.

But through political means, local state and federal lawmakers have convinced themselves sinking money in the Vidalia port makes good sense. That logic may not look so smart in hindsight since the state is broke and struggling to get out of its own pending financial train wreck.

Perhaps the shock of nearly hitting rock bottom will force lawmakers into swallowing a reality pill and beginning to significantly pare back their spending.


Kevin Cooper is publisher of The Natchez Democrat. He can be reached at 601-445-3539 or