What’s at the end of the road?
Today the House is poised to bust the state debt "cap" by $250 million, which will increase annual state spending by $22 million.
Nothing has been done this session to reduce the ever-growing pension funds’ unfunded liabilities ("UAL"). That has already grown to approximately $20 billion.
Since Bobby Jindal has been governor, it has been an annual lege ritual to avoid fiscal reality and simply "kick the can down the road."
Leges talk about kicking the can down the road (meaning putting off dealing with the tough fiscal issues), but none have articulated when the road ends or what happens when it does.
Perhaps the leges believe that our economy will improve enough in the future to generate enough revenues to continue the funding. Thus far the annual spending has exceeded the annual revenues that our economy can generate.
We know that the "end of the road" for Bobby Jindal is Jan. 11, 2016. That’s when he moves on to another job, most likely in another state.
What happens to the citizens who remain in Louisiana after January 2016?
History indicates that economic growth of the magnitude needed to generate revenues to maintain the budget status quo, pay the state debt and pay off the billions of dollars in UAL by 2029 isn’t possible.
That leaves only three options for 2016: Over a billion dollars in cuts to public services or over a billion dollars in new taxes or a combination of the two.
History indicates that it is easier to get a 2/3rds vote of the lege to raise taxes rather than a majority to significantly cut the budget. The only realistic scenario is massive higher taxes regardless of who is our next governor.
We should begin today asking our leges and those who want to be our next governor what, specifically, are their fiscal plans for 2016.
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