Search This Blog


Blanco declares Christmas early ignoring reality, chasing votes

As Christmas approaches, just call Gov. Kathleen BlancoSanta Claus” – as her popularity continues to slip ahead of an election year, she’s taken to promising everything to everybody.

Now she’s pledging that a roughly $827 million surplus from the past fiscal year – which can only be used on nonrecurring expenditures – will be matched by a similar amount in the present fiscal year. Further, she expects “surpluses” to recur over the next five years.

Of course, this begs the question, if we know already they exceed current budgetary projections and thus factor them into budget calculations, how can they be “surpluses?” Regardless, the anticipated 2006-07 surplus calls not for the doling out of goodies such as pay raises but uses that tackle long term fiscal problems facing Louisiana such as the backlog of road construction and unfunded accrued liabilities in the state’s pension systems. Even avowed populist and potential Blanco opponent Public Service Commissioner Foster Campbell recognizes that, as many economists have pointed out, any surpluses Louisiana experiences will be as a result of a “false economy” – an inflated economy as a result of tens of billions of dollars pumped into the state artificially by the federal government for recovery purposes that will not be sustained over the long run.

Yet Blanco wants to have any 2006-07 surplus declared as recurring, meaning it could be used for continuous expenditures such as pay raises for teachers, public service employees, and the like. This is a tried a true method of Louisiana politics to buy off certain voting blocs ahead of an election, by promising goodies. By asserting, without any real validity, that the “surpluses” will continue, she is trying to build a case to justify this transparent attempt to buy votes that puts the state’s fiscal condition at great hazard.

It’s an extremely risky and detrimental strategy that seeks to encumber recurring expenditures to what likely will be nonrecurring, if ever realized, revenues boosts. Much smarter would be a conservative strategy that recognizes these revenues for what they are, gifts from the American taxpayer that cannot be expected to reappear, usable only to reduce long term problems. But, from the Blanco perspective, as demonstrated in her choices of support for legislation over the past three years, trying to eat into the roads backlog or the pension liability in her view doesn’t gain her a lot of political mileage that will translate into votes, even if they are huge crises.

It would be supremely reckless to make commitments to recurring spending out of any potential revenues that exist. However, we must understand that such policy pronouncements by Blanco are more about getting her another four years in office than a serious attempt to put Louisiana on a sound fiscal basis.

No comments: