Blanco attempts to rewrite her economic policy history

Gov. Kathleen Blanco was quick to take credit where none was deserved, and her Commissioner of Administration Jerry Luke LeBlanc was nimble enough to throw up a smokescreen, regarding Louisiana’s projected $1 billion surplus from this past fiscal year.

The higher-than-expected amount, which only can be spent essentially on one-time items, came from three main sources: the avalanche of federal recovery dollars still coming into the state, record-high oil prices, and an unanticipated lack of desire of the state’s citizenry to take an insurance tax credit to offset state-mandated increases in homeowners’ insurance. Even as Blanco said the surplus came from “Our [administration’s] economic development efforts … taking root statewide,” anybody with any sense can note these things operate entirely independently of state government policy – unless one considers that Blanco’s ineptitude in dealing with recovery from the 2005 hurricane disasters delayed the reception of federal funds that only now are showing up in last year’s totals.

(Blanco made this disingenuous remark while on a trip to Spain, illustrating her idea of economic development policy – throw billions of dollars in quixotic quests to bring business to the state, rather than forgoing legal bribery in favor of real, substantial tax cuts for business and individuals and regulatory reform.)

LeBlanc chimed in that the latest projection served to vindicate Blanco against complaints during the last legislative session that her free-spending ways on new programs and recurring program increases would prove to be unsustainable: “We felt all along that this could be sustainable.” This means he missed the point entirely: the surplus money here is for non-recurring commitments; no figures were given on expected recurring revenues in this fiscal year.

(Perhaps Blanco will be able to take credit for some increase next year as well. Because her administration pulled a fast one by ignoring federal government regulations on the Road Home Program and overspent federal money on it, the state has put the federal government into the position where it probably will cough up as much as $4 billion extra. This means, when all is said and done, there exists perhaps another $500 million the state can rake off extra in the form of taxes that is one-time revenue in nature. No doubt Blanco revisionists will style this as part of the “sustainable” economy.)

Of the worthy items out there to which the surplus needs dedication by the next governor, perhaps paying off debt which has reached record levels under Blanco is the best choice. At least the forgone interest payments from early retirement can be used to mitigate her recurring spending increases otherwise unaddressed by this recent forecast which continue to threaten the state’s fiscal health, despite what Blanco and LeBlanc want the public to believe.