LA budget inevitably faces cuts starting now

As the physical health of Louisianans remains threatened, the state’s current fiscal health continues to deteriorate, with more damage coming as a result of extending by Democrat Gov. John Bel Edwards measures that effectively close many businesses and dampen commerce now through the end of April.

To review the condition of the state financially prior to the first Edwards proclamation that attenuated business activity, economists had predicted on the order of $170 to $236 million greater revenues for fiscal year 2020, and for FY 2021 of $103 million. The orders will have put a halt to some business activities for at least one-eighth of the year. Essentially, five things are affected: income taxes, sales taxes, gaming taxes, other taxes, and severance/petroleum taxes and their externalities.

Some, like casino operations and video poker, essentially are shut down entirely for the entire period. Others like sales tax and income tax face some shrinkage because commerce declines and idled workers draw no income, nor do shuttered business. A depressed economy somewhat affects oil prices by reducing demand, but other exogenous factors also play out that will depress the price. The state estimated around $59 a barrel on average for FY 2020 and $60 for FY 2021.

Edwards chose higher-cost way to flatten curve

The good news is Louisiana maybe has entered the downhill portion past the worst of the health crisis. The bad news is that policy decisions will make that stretch longer and more painful than it could have been.

Yesterday, at what has become typical afternoon news conferences concerning the Wuhan coronavirus pandemic, Democrat Gov. John Bel Edwards sounded more upbeat about the state’s prospects. He proclaimed that, in part due to what he alleged was the nation’s highest rate of testing and to social distancing measures (many of which come imposed courtesy of a series of proclamations he has made utilizing emergency powers), the rate of infection seemed to be tailing off, or “flattening the curve.” He recommended staying the course, continuing such measures and his proclamations to encourage these through their targeted expiration date of Apr. 30.

He was wrong about the testing data. Actually, as of that time (and as of today as well), Louisiana ranked second per capita in the country, at 1.61 percent of the population tested, to New York’s 1.75 percent. The Empire State continues to lead Louisiana in deaths per million, 322 to 140, and in infection ratio of 1:130 to 1:273 (Louisiana also has started to trail New Jersey in both categories as well).

LA virus policy leaves little improvement room

The bad news is Democrat Gov. John Bel Edwards made mistakes in his responses to the Wuhan coronavirus outbreak in the state. The worse news is as a result he can’t do much to attenuate its ill-effects, which are among the worst in the country.

Essentially, Edwards did three things wrong:

1.     He discounted the massive incubation effect of Carnival and the proactive strategy it required to mitigate.

2.     He banked everything on a one-size-fits-all reactive social distancing strategy.

3.     He became locked into that where intensifying it brings few rewards with many costs and leaves no genuinely good alternatives.

LA has virus costs under control ... for now

The costs Louisiana incurs in battling the Wuhan coronavirus pandemic keep adding up, potentially presenting a growing budgetary problem.

Louisiana’s condition deteriorated rapidly so that as of today it ranks third in both infection rate and deaths per capita, prompting Democrat Gov. John Bel Edwards only two weeks after the first confirmed case to ask for and have granted a disaster declaration from Republican Pres. Donald Trump. This allows the state to have 75 percent of disaster-related costs reimbursed by the federal government.

The problem is, these have accumulated quickly. As of this morning, the state had spent almost $569 million on its response. This means it and local governments owe in the neighborhood of $142 million.

Failing LA virus strategy needs drastic change

When Louisiana found itself unprepared to test aggressively for the Wuhan coronavirus as a proactive strategy to quarantine or treat, the fallback reactive strategy that Democrat Gov. John Bel Edwards had to resort to assumes personal behavior will flatten the infection curve. But it’s not working well, precisely because leadership failed to prepare for the onslaught.

Edwards has rolled the dice on exhorting the citizenry to minimize personal contact among themselves in order to break the back of the state’s infection rate that not only stubbornly refuses to subside, but also tries to shift higher. His strategy also treats the state as one, despite the enormously higher rates of infection and death in the New Orleans area. This weekend, he plead some more for the public to follow social distancing guidelines as directed from his office, saying strict adherence to these could make a big difference.

Not really. It would help, but only to turn a prolonged large disaster in certain parishes into a lesser, somewhat shorter disaster in these. Had Edwards acted differently a month ago, it never would have mutated into a crisis of these proportions.