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Louisiana spending spree contrary to other states' saving

Astute observers of the actions of the Louisiana Legislature and Gov. Kathleen Blanco developed queasy feelings watching state government’s budget machinations over the past year. After initially making cuts (but of an indiscriminate kind), much of what had been saved got recommitted, often for the same purposes. These actions seemed mistaken at the time, and now evidence comes to verify that they also are out of step with the rest of America.

At its ongoing annual meeting the National Conference of State Legislatures issued a report showing that, in the past year, even if only three states cut spending, many saved surprise excess revenues, or spent them on one-time projects. New continuing spending was shunned because many states remain cautious about their economic futures (an entirely valid concern should Democrats take charge of Congress and/or the presidency within the next three years).

Naturally, Louisiana remained an outlier to this trend. In an absolute sense, its spending ballooned, but even taking out federal funds pumped in for hurricane recovery spending increased year over year. But, unlike states which bolstered their emergency savings funds, Louisiana withdrew from its. (The state did put in $150 million for anticipated emergency spending, which is really more like an appropriation for continuing expenses, but even this amount is several times smaller than the amount withdrawn from the Budget Stabilization Fund in 2005).

Worse, as some have argued all along, the overall budget picture remains risky and presumed surge in revenues coming from federal relief spending has created a false sense of security. Studies of previous disasters show a pattern of a rapid, temporary boost in state revenues followed by a decline. If any state should have been shoring up its savings this year, it should have been Louisiana.

Instead, Blanco and the Legislature spent like drunken sailors. They called this lousy tune, and soon the people may have to pay the piper as a result.

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