Budget woes hit state of Louisiana
Financial officials in Louisiana say a budget shortfall this year is a certainty, given a loss of between $1 billion and $1.5 billion in state revenue because of two major hurricanes.That would certainly give many who left an incentive not to return. I just do not see that as a way to attract people back to New Orleans.
"There's no way we're not going to have a shortfall. About a third of our state's economy is in the tank," Jim Baronet, spokesman for the Louisiana Division of Administration, told The Washington Times yesterday.
"The tax base is gone," Mr. Baronet said. "The devastation was so complete that there is no business, there are no utilities, no infrastructure in place, no customers. No economic infrastructure exists."
He said Louisiana's annual budget is about $12 billion and that the size of the budget hole should be known as early as today.
Asked whether steep spending cuts are likely, Mr. Baronet said: "Laws here may be different than in other states, but we have constitutional and statutory requirements against draconian budget cuts."
He said tax increases have not been proposed, but he doesn't rule them out.
"Taxes could be the only solution we have. If so, we'll have to bite the bullet and do it," Mr. Baronet said.