Our Views: Red ink hits other states

• Advocate Opinion page staff
• Published: Jul 24, 2008 - Page: 10B - UPDATED: 12:05 a.m.

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Gov. Bobby Jindal’s veto of millions in state spending comes at a time when Louisiana’s state treasury, unlike many state budgets across the country, is relatively flush.

“This time, we have the money. Cash isn’t an issue,” the nonpartisan Council for a Better Louisiana noted in a recent commentary on the budget. “Louisiana is cutting its spending not because we’re being forced to, but because we’re making a strategic decision to fund things in a different way.”

Fiscal restraint is wise, CABL added, because Louisiana’s fairly robust state budget isn’t the result of transformations in the state economy, but two special circumstances: an influx of rebuilding dollars after the 2005 storms, and high energy prices. As an oil and gas state, Louisiana gets extra tax and royalty revenue when energy prices rise.

These special circumstances mean that in the long term, Louisiana’s state government shouldn’t use these windfalls as an excuse to continue business as usual.

“As we move forward, we must maintain our fiscal restraint,” CABL urged. “While our state general fund is relatively healthy now, we need to place a moratorium, of sorts, on the kinds of things that will reduce it or make it less stable and predictable. Louisiana has largely avoided the major effects of the slowing national economy, but we are not immune.”

In its commentary, CABL argued for investing windfalls in the state budget strategically in keys areas, such as education.

“While (many) other states are struggling to make ends meet, Louisiana’s biggest enemy right now is being shortsighted. Fortunately, that’s an enemy we can easily overcome, if we choose to,” CABL said.

Increasing teacher pay and fully funding higher education during the recent legislative session suggest the kind of strategic investment CABL is talking about.

We don’t think the governor vetoed enough wasteful spending in the state government’s budget, but his willingness to cut as much as he did, even without a sea of red ink lapping at the steps of the State Capitol, is a welcome development.