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Story Archives: The warnings mount
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|The warnings mount|
Up to her last days in office, former Gov. Kathleen Blanco insisted that the post-Katrina surplus and her administration's spend-happy ways were sustainable into the future. She dismissed critics who warned of a potential fiscal crisis as alarmists.
But only four weeks after her departure, dwindling projections on the longevity of the surplus suggest that a fiscal correction may be needed much sooner than the former governor's rose-colored shades allowed her to see.
State economists Monday added $207 million to revenue projections through mid-2009, increasing the sum of extra money to more than $2.6 billion. That's no small change. But the good news came with more evidence that the post-Katrina boom is slowing down.
The extra amount added this week pales in comparison to the $1.1 billion added in the previous revenue estimate two months ago. In addition, sales tax collections -- which have been fueling much of the boom -- are now expected to be $76 million lower this year than what economists estimated in December.
The state is usually conservative in guessing how much moola it will bring in, so the amounts could rise later in the year. But economists are making it clear that the gravy train seems to be running out of steam.
Meanwhile, Gov. Bobby Jindal's team says that continuing Blanco-sized state spending would cost an extra $550 million next year. The surplus can cover the increased cost this time, but what about long term?
All these signs point to one conclusion: The state needs to start moving back toward living within its means. Surpluses should be spent on non-recurring, long-term investments such as rebuilding South Louisiana, investing in statewide infrastructure and paying down the state's retirement system debt.
That's what Gov. Jindal and the Legislature need to keep in mind as they go into session later this year to divvy up last year's surplus.
We can only hope the financial picture does not get bleaker by then.
-- The Times-Picayune
|Frank Morris Murder Series|