Sunday, March 06, 2016

GOP Policies Cause Louisiana to Falls into Budget Crisis

The blog has looked at the economic disaster that the implementation of "true conservative" policies under Gov. Brownback and Republicans brought to Kansas.  Less mentioned is what similar policies under Bobby Jindal brought to Louisiana.  What is particularly frightening is that the failed policies implemented in Kansas and Louisiana are almost virtually the same as those being espoused by every one of the Republican presidential candidates save Donald Trump who has yet to lay out in any detail what he would seek to do.  Stated another way, the GOP presidential candidates want to bring economic and budget disasters nationwide as they once again espouse voodoo economics and trickle down economics that have twice devastated the U.S. economy and budget deficit. Bill Clinton and Barack Obama had to undo the budget wreckage wrought by Reagan and Chimperator George W. Bush.  A piece in the Washington Post looks at the Louisiana disaster which ought to send off alarm bells for anyone contemplating voting Republican in November.  Here are highlights:
Already, the state of Louisiana had gutted university spending and depleted its rainy-day funds. It had cut 30,000 employees and furloughed others. It had slashed the number of child services staffers, including those devoted to foster family recruitment, and young abuse victims for the first time were spending nights at government offices.
And then, the state’s new governor, John Bel Edwards (D), came on TV and said the worst was yet to come..
Edwards, in a prime-time address on Feb. 11, said he’d learned of “devastating facts” about the extent of the state’s budget shortfall and said that Louisiana was plunging into a “historic fiscal crisis.” Despite all the cuts of the previous years, the nation’s second-poorest state still needed nearly $3 billion — almost $650 per person — just to maintain its regular services over the next 16 months. Edwards  gave the state’s lawmakers three weeks to figure out a solution,
Louisiana stands at the brink of economic disaster. Without sharp and painful tax increases in the coming weeks, the government will cease to offer many of its vital services, including education opportunities and certain programs for the needy. A few universities will shut down and declare bankruptcy. Graduations will be canceled. Students will lose scholarships. Select hospitals will close. Patients will lose funding for treatment of disabilities. Some reports of child abuse will go un-investigated.
But even if Louisiana’s Republican-dominated legislature approves certain tax increases, as most expect, the state still would grapple with problems. The taxes — which could include hikes on everything from groceries to salaries — would dig into the pockets of citizens in a state where 18 percent live in poverty and where the median income is 20 percent below the national average. 
Many of the state’s economic analysts say a structural budget deficit emerged and then grew under former governor Bobby Jindal, who, during his eight years in office, reduced the state’s revenue by offering tax breaks to the middle class and wealthy. He also created new subsidies aimed at luring and keeping businesses. Those policies, state data show, didn’t deliver the desired economic growth. This year, Louisiana has doled out $210 million more to corporations in the form of credits and subsidies than it has collected from them in taxes.
The math is daunting: For the fiscal year that ends June 30, Louisiana is facing a $940 million deficit, roughly one-eighth of what the state typically doles out from its general fund in a year. For 2016-2017, which begins July 1, the gap is $2 billion.
On Jindal’s watch, nearly every agency in Louisiana shed employees, and state lawmakers say some teetered because of the losses. The Department of Children and Family Services shrank to 3,400 employees, from 5,000 in 2008, and social workers began carrying caseloads larger than national standards. The state also cut funding for youth services and mental health treatment.
In recent days, lawmakers have zeroed in on a plan that would somewhat narrow the deficit for the rest of this fiscal year but barely make a dent in the $2 billion gap for next year. Lawmakers would raise sales and cigarette taxes while dipping further into a rainy-day fund. They would also use settlement funds from BP, the company responsible for a 2010 oil spill in the Gulf of Mexico. Still, massive cuts would still be required for hospitals and universities.
Since the 2007-08 school year, Louisiana has cut funding for higher education by 44 percent, the sharpest pullback in the nation; Southern has seen its funding cut 49 percent. During that time, the burden of supporting education has flipped: Whereas the state once provided 70 percent of the money its schools spent, now the students support the bulk of the costs — in the form of higher tuition.
A popular “TOPS” scholarship fund — available to anybody in the state with a 20 ACT score and a 2.5 GPA — is depleted. Some students will lose their scholarships, and for a future batch of high schoolers, the fund will be unavailable. Belton said that many students were taking out new loans to deal with the rising tuition or stressing about how they would remain enrolled.
“We’re trying to provide for a middle class in America,” he said. “And to compromise that mission compromises the promise for the state.”
Republicans, despite lip service to the contrary, do not give a damn about America's middle class or average workers.  Rather, corporate welfare and tax cuts for the wealthy are the only real agenda.  Take a good look at Kansas and Louisiana - this could be all of America if the GOP wins the White House and retains control of Congress.

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