The legislative sessions are finally over.  At the end of the day, whether everyone agreed on how we got there, we do have a budget.  Higher education and other critical needs were spared from cuts, and the Legislature and the Administration together backed us off the fiscal cliff.

This is all good news, for now.  We may have solved today’s problems, but we’re still ignoring tomorrow’s.  We’ve done nothing to make lasting, structural changes to our budget and how we operate state government.

Before becoming State Treasurer I was a legislator for 10 years and have gotten quite familiar with the spending habits of various administrations.  Over the past two years, Louisiana’s expenditures have grown quite a bit.  I believe government is on an unaffordable track, and I’m afraid we will outgrow any new cash faster than you can blink.

One of the reasons government growth is unsustainable is because your income isn’t keeping up.  Over the last two years, state government expenditures have grown by over 24 percent, while income for Louisiana residents who go to work every day has grown by less than 1 percent.  This is an unsustainable pace!

One thing that is growing along with government spending is Louisiana’s individual per capita debt.  It was $1,615 in 2017 compared to $1,138 in neighboring states.  We’re almost $500 a person higher than Alabama, Arkansas, Georgia, Kentucky, Mississippi and Tennessee.

We’ve got an unreformed tax structure; a state employee pension system that needs to be fixed; a Medicaid program that needs accountability; a capital outlay process that is broken; and our state savings account known as the “Rainy Day Fund” is grossly underfunded.  In fact, last year $99 million was moved from the account to shore up a projected shortfall, only to have a surplus at the end of the year and not need the money.  Instead of returning “ALL” of the money back to the account, most was spent on pet projects around the state.

We know what’s broken, but how do we fix it?  We have to improve our Rainy Day savings account, and I will continue to strongly push for this.  We must also make structural changes to the way we budget.  I encourage the Governor and the Legislature to consider reforms that bring our spending in line with what the taxpayers can afford.  As revenues improve, we need to look at ways to spend less than what the Revenue Estimating Conference recognizes.  This will create a savings every year and ensure we do not have mid-year budget cuts.

There are some things Louisiana is doing right.  The new state government transparency website is up and running.  We’ve had very productive calls with the national Rating Agencies.  Moody’s Investor’s Service has already upgraded the outlook on the state’s credit rating from negative to stable.  Our cash position has improved greatly, and we’re hopeful for other improvements in our bond rating.

We also continue to have a strong asset in the state’s Bond Security and Redemption Fund, which guarantees the state’s debt will be paid first.  It’s one of the best in the nation, and few states have one.

We may not all agree on how we got there, but now that the budget is done, we need to move on.  One of the biggest questions moving forward will be to see where we can get everyone to agree.  I just hope the same passion and effort that was used to raise your taxes will be dedicated to finding structural fixes to the state’s budget.

 ###