Monday, 19 May 2014 16:05

Jindal, Louisiana budget, legislature and jobs quandaries

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Louisiana State Capitol at nightThe Louisiana legislative session is now approaching the home stretch with the budget that needs to be done and balanced before the legislators adjourn on June 2. The impression is that even legislators who are longing for a smaller government are frustrated that there is not enough money to spend.

 Governor Jindal has been and is boasting that Louisiana is the Southern state with the lowest unemployment rate. However, is the 4.5% rate could be hiding other issues. For example, people give up and drop out of a seemingly hopeless job markets as they are doing nationally. Also, while the state average is 4.5%, some areas of Louisiana have a 20-25% unemployment rate. Furthermore, other issues, such as funding higher education and healthcare, need to be addressed.

These were some of the issues discussed this past Saturday during a Bayoubuzz Google hangout discussion with Jim Brown and Tyler bridges. Below is the transcript of the discussion and video of the first part of the interview.  

Bridges: The issue right now is the state budget which the legislature has to pass every year. It's a process where it begins in the House. The House has passed its version of the budget, and now the next step is that it goes to the Senate Finance Committee. They had hearings on Thursday and Friday, and they posed some skeptical questions to the Governor's staff yesterday in the Senate Finance Committee. At some point, the Finance Committee will pass it, and then it will go to the Senate floor. Then, the Senate will pass its version of the budget. They'll inevitably make some changes, and then it will have to go back to the House for final approval before the legislature adjourns on June 2.

Sabludowsky: So what does the budget look like at this point in time? What are the big issues there?

Bridges: The legislators are frustrated that there's not more money to spend for all sorts of projects; to restore some of the cuts to particularly higher education that occurred during the Jindal years. Steve, there's supposed to be a thing going on. Louisiana has the lowest unemployment rate in the South. Governor Jindal has trumpeted that. The unemployment rate now is down to 4.5% in Louisiana. Jobs are not being created enough to throw out tax revenue. At least tax revenue is not coming in in a way know, a bunch of other states got budget surpluses as the economy improves, but that's not happening in Louisiana. That's a big concern for legislators.


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Sabludowsky: That's really strange, isn't it? What is it, that we're just not taxing enough? Is that the overall issue? Bridges: I talked to two top economists lately. One is Lawrence Scott, who's retired from LSU, and then Jim Richardson, who is at LSU still. They both said they're puzzled by it. On Monday, what's called the revenue estimating conference will meet, and this is a four-member panel who looks at the state's finances and says how much money is available based on how much money is coming in; the projections for the future. When I'm hearing that the sales tax revenue and income tax revenue for the state is mostly flat, maybe a bit of a bump recently in corporate tax revenue. That means that there's not more money to spend now. If you'd like less government, that may be a good thing. But even legislators who say they want less government would rather have more money to spend.

Sabludowsky: Jim Brown, obviously, you were in government for 27 years. I'm just wondering: did y'all have, when you were in government, did you have this kind of issue where the job situation was better?

Brown: First of all, I don't know where there's a lack of those wanting a job. I find, as I travel around the state, that the economy and better jobs are a tremendous issue. I don't know how those figures are skewed and scored and how they affect it. But there's a lot of people just giving up on the job market. They are not working. They're just backing off and taking the welfare benefits, or they just decided to give up and not work. So I'm not sure that we got this robust economy where there are great jobs out there. I get calls every day, any chance I can recommend a job for them, and I hear that everywhere. I'm not really excited about that 5% number because the reflection is: if you get around the state, there are lots of people looking for jobs; seniors who have been cut out of their positions because things are being contracted out. You go up in Northeast Louisiana where many of those parishes have 20-25% unemployment. So, again, I don't know where those figures came from; I just don't think they truly reflect the job market. You go down to New Orleans and pretty much in this city, there's some great opportunity if you got a good education in a particular field. If you deal in computers, if you have a cross-section...but let me tell you what. If you're an English major in New Orleans, you just can't find a job. They're not hiring at UNO; they're not hiring at the various universities. So I'm not real optimistic about that 5% number.

Bridges: Just to be quick, I think it's actually 4.5%. That's what they say it is right now.

Sabludowsky: Right. I think you're right, Tyler. Part of that, and this wasn't mentioned, at least in terms of Governor Jindal's comments, is that the unemployed actually had increased to, I believe, 95,000, although there were 2 million people employed. But the number of unemployed people actually increased over last month. My question is whether or not we're seeing, pretty much in Louisiana, what we're seeing around the country, and that is, people are not looking for jobs; they're giving up.

Brown: I'm finding, for example, a lot of state employees here in Baton Rouge who have been laid off because of some consolidation for a number of reasons. They initially would want to work a little longer to draw a better retirement, but they're just taking a small retirement, and they're saying that they just can't find anything. So is a person like that in the figures, or are they considered out of the figures? There's a lot of ifs and uncertainty. I wish we had a robust 4.5% economy; I just don't see.

Bridges: Jim raises an important point, Steve, which is that people who are not looking for work are not counted as unemployed. That, in fact, is one of the reasons why the unemployment rate nationally has come down. It's because there are fewer people looking for work. The figure shows that the same thing is happening in Louisiana. That, I think, helps explain Jim's point.

Brown: But I comment on something that Tyler brought up about the emphasis in the legislature. I picked up today's Morning Advocate, and I've got it right here in front of me. I think it points out the emphasis I see in the legislature. The lead story is about abortion; the legislature and abortion. Down at the bottom of the front page, it talks about money; the budget lacks money for Gulf oil spill and some of the money crises. There's such an emphasis in this session on social issues, cultural issues, that I've seen more than maybe in years past. Abortion, gay marriage...there's a vote on the gay marriage issue, throwing out the sodomy law. An awful lot of emphasis on those pieces of legislation. Yes, Tyler is right; they are trying to deal with the budget, but there's this massive giant hanging out there of healthcare to where we can be stuck with having to come up with a billion dollars because of this healthcare debacle put on by the Jindal administration. And then what's happening with higher education; Tyler referred to this earlier. From about 2008? and on, the cuts have been 40%. You can't run a major educational operation with 40% cuts when inflation is bringing the cost up all the more. There are these huge unresolved financial issues that are hanging over the legislature; they're just trying to get by. They're kinda punting the problem, just hoping and praying the feds are going to come in and bail them out. I got some real questions in my mind as to whether that is going to happen. I think right now, unless there are some major changes, as Tyler said, they're going to get a budget together, but we're going to see a special session in the legislature coming up this fall. There's too many unanswered financial questions that aren't going to be addressed, and the Governor is just going to have to call a special session.


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