With oil prices down to record levels and the Katrina rebuild money ebbing, Louisiana Governor Jindal and the Louisiana Legislature have a problem.  The state is no longer flush with cash and certain programs might need to be flushed with a greater than one billion dollar deficit projected.

As indicated in the Advocate, “Legislative Fiscal Officer Gordon Monk said the thinking was the state would be fine for the current fiscal year if oil prices stayed in the low $70s. Oil is dipping below $60 a barrel, he said.”

Yes, Governor Jindal and Mr and Mrs. Public, we’ve got a problem.

Fiscal conservatives want to use more than a scalpel.  They prefer a buzzsaw.  Meantime, the state is still trying to recover from Katrina and major projects such as the rebuilding of a hospital system in New Orleans is up for grabs.

Obviously, what goes down can always go up.  Nobody this summer would have expected a plunge of two-dollars-per-gallon gas price at the pump all occurring within a short three-month period.   If Louisiana government is lucky, those prices could move upward although consumers at the pump will certainly complain.

Still, if prices continue to drop or remain steady and if additional money is not added to the coffers by the federal government, Louisiana has two choices:  raise taxes to maintain the services in place or cut, baby, cut.

If we decide the latter, the question is where do we carve?

Do we cut money for roads, schools, hospitals, government buildings, teacher pay or the many sundry allocations and appropriations?  Do we do away with or reduce tax incentives that have spawned economic growth.  

What will our legislators do regarding their own salaries?  Many feel strained spending countless hours serving the public, but can they dare bring up pay increases in this environment?

These are just some of the questions the public, the legislature and the Governor will need to address as the national economy is beginning to intrude upon state affairs.

Some are pleased with less government and see the economy downturn as a upside.  However, when courses are not available in Universities and kids go to Elsewhere University to get a degree, when lines for government services become substantially longer, when police and district attorneys cannot fund their departments, the lack of money and government begin to hit home. 

Louisiana will soon need to decide its fate.  Post-Katrina, Governor Blanco cut the budget by one billion dollars.  Mayor Nagin laid off approximately sixty percent of his workforce.  Cutting has been done before during times of necessity.

Hard questions require hard solutions.  Right now, everyone wants “bail outs”.  If we don’t save the auto industry, locations such as Shreveport suffers.  If we don’t maintain the cash flow to South Louisiana, our wetlands and coasts become that much more vulnerable which impacts our energy industry, our fisheries and our largest cities. 

Money has been called the “root of all evil”.  In reality, the lack of money is the real culprit.  It appears that Louisiana will need to decide once again and for the first time, Governor Jindal will be forced to pay very close attention over what the legislature does when it starts filing legislation that could come back and nearly cause a mini-revolution. 

It is during lean years when a Governor really tests his mettle.  So far, it has all been medals for Governor Bobby Jindal, but, now times could be different.  It could be a “gas” to watch how the man who could be President handles a state budget that is a day’s work by federal fun funding.

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