Louisiana must tackle old issues before spending anew

A financial windfall is headed Louisiana’s way, current trends remaining as they are. And this good fortune should be treated this way – as a windfall and not something to count on consistently.

The Revenue Estimating Conference found $584 million in money for this year, but the bulk of it is in what is termed nonrecurring funds. Only around $100 million is expected to be in recurring funds, the bulk of that from sales and income taxes related to rebuilding the state after the 2005 hurricane disasters.

However, even before the hard numbers came out voices arose to bolster the chances of educator pay raises. Somewhat recklessly, despite the great uncertainty about Louisiana’s economy and storm-related costs, Gov. Kathleen Blanco had tossed in her budget this raise. With “extra” money now out there, that might provide enough of a cushion to grant it.

But before leaping, legislators need to take another good, long look. First, the concept of the raise rests on a dubious assertion – that state educators deserve it. Already, they are overpaid relative to indicators of student success. That should being pause to those who simply would hand out raises and hope for improved student achievement; better would be to implement an accountability system that rigorously and regularly assesses the knowledge of teachers regardless of how many years they have been teaching, with correction, demotion, and discharge as measures employed against those who are not capable. No raise should be given without also asking for increased accountability.

Also, there’s still enough uncertainty out there to merit cautious handling of funds. Witness the federal government flood assistance bills that have come due to the state – now up to $291 million for this year with a figure nearly 13 times that estimated to hit the state over the next eight to ten years. And what about the unfunded accrued liability that will cost the state billions of dollars – one bill in front of the Legislature would mandate $110 million a year for over 20 years paid to reduce this?

(As the REC met, the Senate Finance Committee also met to deal with a bill to reduce the state’s crushing $12 billion unfunded accrued liability in retirement accounts. There, Assistant Commissioner of Administration Jean Vandal made it known that Blanco would rather spend extra recurring revenues on raises than on fixing the existing problem.)

Oil prices won’t remain consistently this high forever, and it’s better to bank some money in the unpredictability left in the wake of the 2005 hurricane disasters. Why not work on the accountability system first, so it would be ready to go in a year or two when the true strength of Louisiana’s economy will be more obvious and forthcoming federal bills more predictable? Then, if the money is there on a recurring basis given other priorities, prudently the state can take another step in reforming its underperforming educational system.