Thursday, 02 July 2015 15:55

Should Louisiana use any of the $6.7B from BP settlement to plug future budget holes?

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cash-floatShould any of the projected $6.7B dollars that Louisiana anticipates be used for the general funds now that the BP oil spill settlement has been agreed upon, subject to court approval? 

The Louisiana State budget under Governor Bobby Jindal that went into effect on July 1 was $1.6B in the hole until the legislature raised over $700B in taxes on businesses.  Future projections for state budgets are between one and two billion dollars per year. 


Universities have been threatened with closures.  The state healthcare communities have been so concerned with budget cuts that the Louisiana legislature passed a resolution that would allow for the acceptance of the "dreaded" Obamacare medicaid expansion of the Affordable Care Act, legislation that Jindal and the republican legislators have resoundly rejected in the past.

This fall, Louisiana is facing statewide elections which include the Governor’s race and the Louisiana legislative elections. 

One of the major expected controversies during this election session will likely be whether to use any part of the settlement funds to offset the expected budget deficits, and if so, how much should be used in the future? 

Yet, one of the major criticisms this year and over the past years of the Jindal administration (and the past two terms of the legislature) have been the steady use of one-time monies, the selling off of settlement funds, and the constant use of money from dedicated funds such as funds for the Louisiana gulf coast.   

Already, certain organizations and stakeholders, who have "skins" in the coastal erosion and rebuilding the Gulf Coast "games" have come out to demand that government keep its hands off of the money. 

Just in:

    In response to my email, whether any of the money can be used for general fund,  Raleigh Hoke of the Gulf Restoration Outlook, replied    

The Natural Resource Damage Assessment funds will be distributed according to the rules outlined by the Oil Pollution act and the guidelines established by the NRDA trustees, and are supposed to go to projects to restore the ecosystems harmed by the BP disaster and/or the public's lost use of natural resources. The 80 percent of the CWA fines that will flow to the Gulf well be governed by what the RESTORE act says and the RESTORE council. In both cases,  there are some ground rules for how these funds are disbursed, but we remain concerned that politicians will try to divert these dollars to their pet projects.

It's less clear who and how decisions will be made about some of the other pots of money.                       

Here is a statement from relevant organizations who have offered their opinions as to how to spend this windfall: 

National and local organizations working on Gulf of Mexico and Mississippi River Delta restoration – Environmental Defense Fund, National Wildlife Federation, National Audubon Society, Ocean Conservancy,The Nature Conservancy, Coalition to Restore Coastal Louisiana and Lake Pontchartrain Basin Foundation – released the following statement in response to today’s announcement of an agreement in principle between the Gulf states, federal government and BP for its role in the largest U.S. offshore oil disaster in history. Although the settlement will not be finalized for several weeks, the agreement will dedicate billions of dollars to restore damage caused by the 2010 Deepwater Horizon oil spill.

“In sharp contrast to the decades-long litigation following the Exxon Valdez spill, federal and state leaders have wasted no time in closing this case. Their swift work means meaningful restoration efforts are imminent. Their leadership, at this moment, is invaluable.

While we await key details, one thing is clear: As soon as the settlement is final, it will be time to put that money to work.

We need our leaders to make sure that every dime of this settlement is used as it is intended: to address oil spill impacts and repair long-standing ecosystem damage. We cannot afford to wait any longer. The Gulf ecosystem is the backbone of the local economy and our primary defense from storms during hurricane season.

This settlement, which promises to be the largest environmental settlement in American history, is an unprecedented opportunity to accelerate and expand the response to the devastating harm caused by the spill, and to build lasting resilience into the essential ecosystems of the Gulf.

We are especially encouraged that the settlement will put special emphasis on restoring health to the Mississippi River Delta and its coastal wetlands. We also urge leaders in NOAA and other agencies to leverage resources from this settlement to restore marine resources.”

A recent infographic depicts ongoing impacts of the Gulf oil disaster five years later. And over the past year alone, new scientific research has surfaced:

  • A 2014 study found evidence of a 1,250-square-mile area of oil contamination on the ocean floor around the Macondo wellhead in deep Gulf sediments.

  • A previous NOAA study found a large number of dead dolphins in heavily oiled places, including Barataria Bay, La.

  • Recent studies estimate an unprecedented number of birds (upwards of 1 million) died as a result of being exposed to BP oil.

  • A 2014 study found concentrations of PAH (polycyclic aromatic hydrocarbon) – which can cause harmful effects in many birds, fish and wildlife – in Barataria and Terrebonne marshes, which may persist for decades.

  • A 2012 study found that oiled marshes in Barataria Bay eroded at double the rate of non-oiled marshes.


Stephen Sabludowsky | This email address is being protected from spambots. You need JavaScript enabled to view it.

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