Louisiana's bleak fiscal outlook presents a classic example of something I learned a long time ago: Never assume things can't get worse, because they always can — and often do. Our state's budget problems were years in the making, and the governor and lawmakers are not likely to solve them this year.
At best, legislators will patch over the problem by enacting temporary measures that generate just enough revenue to keep universities and hospitals from closing. There will still be painful cuts — how can there not be with a projected revenue shortfall of $1.6 billion and rising?
Any revenue measures will have to get past Gov. Bobby Jindal, who's not about to lose his precious "tax virginity" after keeping it intact for seven years as governor — and as he prepares to seek the GOP presidential nomination.
There's talk around the Capitol of lawmakers using a resolution (rather than a statute) to suspend a raft of tax exemptions because resolutions cannot be vetoed. Some suspect Jindal secretly wants that to happen so he doesn't have to sign the tax hike or close universities — but he'll still blame lawmakers for raising taxes.
Others say lawmakers should pass a revenue statute early in the session and force Jindal to veto it — to put him on the record for closing universities — and then override his veto. If they can.
Either way, there's going to be a showdown, and Jindal won't be the only one harping about taxes. The Louisiana Association of Business and Industry (LABI) opposes any business tax hikes. Other anti-tax groups — including some out-of-state super PACs — are ready to work the Legislature against revenue increases. Some also will be active in the statewide elections in the fall.
Another possible scenario is the wholesale ravaging of Louisiana's public universities and health care system. Some institutions are talking about closing.
Truth is, Louisiana has too many public universities and too much administrative overhead in higher education. We have five boards of higher education, 14 public universities (plus a few satellite two-year campuses) scattered among three separate college "systems," plus a "system" of community colleges. That's not sustainable in a state our size, and this year some institutions may not survive.
This situation cries out for leadership from the governor, which is the least likely scenario.
To some, perhaps many, that's a completely acceptable outcome. Problem is, closing some universities (and merging the higher ed governing boards) won't save money right away. Laid-off employees get to collect unemployment benefits, and merging the governing boards takes a constitutional amendment that can't go on the ballot until October at the earliest.
Moreover, it takes a lot of political will to close a public university in Louisiana — and a two-thirds vote of the state Legislature. It takes the same two-thirds vote to raise revenue or put a constitutional amendment on the ballot. Right now, there's no evidence that a super-majority exists for any of those options.
This situation cries out for leadership from the governor, which is the least likely scenario. To be sure, Jindal will propose a budget for the next fiscal year, but it won't contain any good news for higher ed and health care.
Every year since he took office in 2008, Jindal's proposed budgets were "balanced" in name only because he consistently spent one-time money on recurring expenses. That means Louisiana has run an operating deficit every year that Jindal has been governor — and now we've run out of funds to raid and assets to sell.
Here's where it gets worse: Lawmakers must trim another $103.5 million from the current fiscal year's budget — on top of more than $280 million in cuts in November. That's been the story every year under Jindal — management by crisis.
A real leader would have devised a long-range plan to stabilize state revenues and right-size our higher education system over the course of several years without penalizing the surviving institutions. Instead, Jindal has run from the tough decisions, papered over his deficits and spread the pain to all institutions. And he's not done yet.
But before the next fiscal year is over he'll be gone. Maybe then things can finally start getting better. Maybe.