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"Shortchange" complaint properly analyzed has little merit

A favorite sport of Louisiana politicians these days is complaining how the state has been allegedly “shortchanged” by the federal government in terms of disaster relief funds. A review of the facts makes this a tenuous argument at best, and any minor disparity can be explained by these and legitimate concerns about the state’s fitness to make wise spending decisions.

One point of contention has been in the majority of cases over the past couple of decades, the federal government has waived the 25 percent state match requirement on federal disaster monies going into a state. While Pres. George W. Bush waived 15 percent of that, the fact that 10 percent still is asked for has raised eyebrows particularly as it concerns the most expensive natural disaster ever.

But what observers forget is that because it is by far the state that ever has had the most federal money pumped into it for this cause (subtracting out federal insurance payouts, the figure is around $42 billion presently; contrast that with the second-most expensive, Hurricane Andrew and Florida in 1992, where subtracting out insurance proceeds the amount came to only $11 billion). At present (because only a small portion of this figure is subject to the state match) the state estimates the reduced requirement is costing the state $400 million.

Well, at present the state is sitting on a huge budget surplus – precisely because of all the federal money pouring into the state. In other words, so much money is coming in that the state is taking in more, probably much more, than $400 million in taxes and excises due to the economic activity of rebuilding the federal money has spurred (after all, Louisiana is balking about paying less than one percent of the total federal money it has received). Yet state politicians, receiving an incredible gift both in terms of rebuilding funds and in fattening state coffers, still moan.

Another grievance has developed around the fact that only 54 percent of community development block grant funds, a major portion of the total funds remitted for disaster response, has gone to Louisiana where by the number of structures damaged the state suffered three-quarters of the total. But there’s nothing that could be done about that because that is a legal requirement. (Sen. Mary Landrieu is authoring legislation to change that.)

Any other disparity in funding can be explained by an unfortunate fact of life, but one that Louisiana politicians refuse to mention precisely because it reflects poorly on them. Simply, of all the states affected by the 2005 hurricane disasters, by far Louisiana traditionally has shown itself to be the most irresponsible in fiscal matters. In the past decade, Alabama, Mississippi, and Texas have elected conservative reformists who have done a far better job of making proper priorities and steering spending more towards their states’ peoples’ benefit and away from taking care of special interests first. Louisiana, by contrast, has remained stuck on stupid by electing majorities who prefer to grow big government and shower rewards on favored constituencies.

Certainly, liberal Democrats are not going to admit this about themselves, and even conservative Republican politicians for the most part shy away from pointing this out because of a desire for comity and in case they engage in some future big spending themselves which could get this turned against them (one of the few who does not hesitate is Rep. Tom Tancredo, now running for president). But anybody who has eyes, ears, and a brain can figure out the big government lovers who haunt Louisiana are going to do a poorer job of disaster relief (Gov. Kathleen Blanco’s Road Home, anyone?) than more responsible politicians in other states.

Which is why the federal response that Louisiana should spend the money it has first, such as the tremendous backlog sitting in the Road Home program, before asking for more is entirely appropriate. Like it or not, reality is the inferior liberal ideology pursued by Democrat Blanco and a Democrat-controlled legislature make them bad bets on which to loosen the reins in this situation. Until Louisiana demonstrates a more responsible attitude and competent ability towards use of the people’s money, common sense and prudence dictates close monitoring such as this is necessary.

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