The panel that identifies the state’s projected income again lowered its expectations for the budget year that ends June 30, as well as the fiscal picture for the following year.One big culprit in Louisiana’s fiscal collapse is the plummeting of oil prices, which are a major industry in the state and a large reason behind the state losing 17,600 jobs in 2015, as well as an unemployment rate well above the rest of the country, at 6.1% This has led to decrease in income and sales tax projections, as well as royalties from the oil industry.
State legislators, who are gearing up for a budget-focused special session this weekend, will now have to come up with about $850 million in cuts to state services or new revenue to balance the current year’s budget and more than $2 billion for the budget that begins July 1.
“For all practical purposes, Louisiana is in its own recession,” said Greg Albrecht, the Legislature’s chief economist. “It’s come on pretty rapidly.”
But there’s another factor in Louisiana’s loss of revenue, and it relates to a long-time strategy of Jindal and the state’s GOP Legislature in trying to attract jobs to the state by giving away massive, WEDC-like tax breaks to corporations.
The state is operating at a net negative on corporate income taxes — meaning it is paying out more in rebates than it is taking in as revenue.Think about that- right now the state of Louisiana is giving out more money to corporations than it’s getting back in corporate taxes! That’s how fucked up Jindal’s policies were, and it directly accounts for such a disastrous shortfall with an economic policy that encourages such rampant rent-seeking.
Things are so bad in Louisiana that Edwards went on TV last night, and not only said that the state’s tuition repayment program (called the Taylor Opportunity Program for Students, or TOPS) is so underfunded that Louisiana can’t pay the universities until the budget crisis is figured out.
“Due to the possibility of state budget cuts, all TOPS payments are being suspended until further notice,” said an email from the Louisiana Office of Student Financial Assistance that went out to all TOPS eligible institutions at 3 p.m. “More details will be provided as information becomes available.”Which means the universities would have to eat millions of dollars. Which they don't have. And that’s not the only bad thing that might happen to the state’s public univerisities.
However, Gov. John Bel Edwards said Thursday night that none of the 49,710 students who are TOPS recipients will have to cover the cost of their scholarships. While about 20 percent of the TOPS scholarships will not be paid, the governor said it will be the universities and colleges that will absorb the loss.
You can say farewell to college football,” he said in his televised speech about the dire state budget situation Thursday evening.NO LSU TIGER FOOTBALL? Now that statement will get the rednecks’ attention. No opener against the Badgers in Lambeau Field with new Tiger Defensive Coordinator Dave Aranda (and his $1.3 million salary) having his first game come against the school he just left? Got my attention as well, since I just got the ticket info for that game today. I'll be lucky to get two tickets....if there's even a game at all.
Edwards is likely exaggerating about there not being any LSU football, but here’s what he meant by that. LSU and the other public schools in the state would run out of money at the end of April. If nothing is resolved by then, it’s possible the faculty and staff walk out (because they’re not being paid), and/or the schools go BANKRUPT, which ends the semester with a ton of incompletes. And even by the shady standards of the SEC, having a semester full of incompletes leads to full-scale academic ineligibility for sports, which means no LSU football in 2016.
Again, that’s an extreme outcome, but you see just what a disaster 8 years of Jindalism and other Bubble-World ALEC policies have been in Louisiana. And Wisconsin is heading in the exact same direction with our own 40-something, economically illiterate governor. We’ve also underfunded our universities, we’ve also cut taxes for the rich and corporate, and we’re also facing chronic budget deficits that have to be fixed year after year.
And just like Louisiana, our governor and ALEC-owned Legislature refuse to consider rolling back the tax cuts that they’ve put in to repair the fiscal damage those moves have caused, and instead continue to double down on the austerity policies that have so badly failed. So while we can react in disgust at how screwed the Land of Duck Dynasty is due to the regressive, negligent policies of the recent past, we need to realize that this is what Wisconsin’s could well look like in the near future, unless this GOP wrecking crew is replaced this Fall.
Oh, and if LSU isn’t able to pay for Dave Aranda because the university goes broke, can we get his expertise back on the sidelines in Madison? Just curious.