2009 is looking like a difficult year for Louisiana and its rising star governor, Bobby Jindal. Falling oil prices have hit state revenues very hard. Louisiana columnist and talk show host Jim Brown estimates a $1.2 billion dollars decline in oil-related tax revenues, forcing Governor Jindal into the unpleasant task of cutting budgets. Last year's state spending was $9.4 billion, while 2009 spending must be cut to $8.2 billion.
Earlier this week, he proposed one such painful round. Michelle Milhollon writes:
Gov. Bobby Jindal proposed a plan Tuesday to cut $341 million in spending by reducing health-care costs, laying off workers and scaling back on BlackBerries.
"Some think the job of government is simply to collect taxes and spend money. I do not subscribe to that view," Jindal said during a news conference at the State Capitol.
Jindal was able to immediately cut $162 million in the current budget year that ends June 30. The rest of the cuts are merely a recommendation unless legislators agree to them at a meeting next week.
The recommended cuts to health care and higher education are lower than anticipated but still sizable.
Sam Hannah, Jr. of the Ouachita Citizen predicts Jindal's high popularity rating will take a big hit.
While the state is not as dependent as it once was on severance taxes collected from the oil patch, Louisiana still relies on a robust oil and gas industry to help pay for scores of social programs and the like, which residents demand from their state government. It's a tall order to fill, or meet.
And meet he must or Jindal will encounter a backlash among the people, who were spoiled by Jindal's performance on the job in his first year in office, though the jury is still out on whether Jindal's first year as governor was a[s] successful as we've been told.
The people also seem to believe that Jindal, the youngest governor in America, can wave a magic wand and make life grand down on the bayou. That's easier said than done, especially when plummeting oil prices helped create an anticipated $2 billion budget deficit heading into the 2009-10 fiscal year, which begins July 1.
Bluntly put, Jindal can either lead the charge in raising taxes to pay for those much-desired state services, or he can govern like a true conservative and cut state spending. It's that simple.
There is also an upside to all of this. The problems of Louisiana mirror those of the nation as a whole. Bobby Jindal has a track record of being able to cut spending, as he did as head of the Louisiana health services some years ago. If he can navigate these tricky waters as well this time, his standing nationally will remain high and even rise.
The other bright star on the GOP horizon, Sarah Palin, also faces declining oil revenue in Alaska, though that state's fiscal health and demand for services do not compare with Louisiana's difficult situation.
Hat tip: EWL