Bobby Jindal and the Louisiana budget battle

Leon Wolf:

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These stories crop up every year in Louisiana and have several features in common: 1. an observation that the state faces a budget shortfall, 2. complaining from various Republicans indicating that revenues (read: taxes) should be raised 3. anecdotal evidence that previous years’ budget cuts have wrought terrible hardships on the people of Louisiana. They always conveniently omit 1. Actual data 2. The context of previous years which indicates that this truly is another instance of same song, different verse.

Allow me to rectify the first of those deficiencies with some actual data about the effect of Jindal’s budgetary approach, which has remained constant throughout virtually his entire tenure. Weak-kneed pundits (and state legislators’) favorite word for Jindal’s budgetary approach is “irresponsible,” primarily because Jindal refuses, out of hand, to consider tax increases to make up shortfalls. There is absolutely no reason given for why this is “irresponsible” other than the ipse dixit of whatever author is playing useful idiot for the media at that point. On the contrary, people who are paid to rate the fiscal responsibility of state governments for the purposes of evaluating government debt have been consistently bullish on Jindal’s budgetary approach. Moody’s has raised the state’s credit rating from A2 (middle of the medium risk tier) when Jindal took office to Aa2 (middle of the low risk tier) today. Standard and Poor’s has also upgraded Louisiana’s credit rating twice since Jindal took office. Fitch has likewise improved Louisiana’s credit rating twice. When Governor Jindal took office in 2008, Louisiana had one of the worst credit ratings in the entire country, and it now finds itself in about the middle of the pack. The people who are paid to evaluate Louisiana’s budget practices from fiscal standpoint clearly view Jindal’s budgetary approach to be sound, especially compared to those of his predecessors.

People who are paid to hyperventilate in public about Republicans, not so much.

Alright, but even if the state budget is in fine shape, you still might argue that the cuts Jindal has made to the state government has hurt the private sector. The primary metric used to back this claim is the fact that Louisiana’s unemployment rate is higher now than it was when Jindal took office. In the first place, it is worth noting that Jindal took office immediately before the recession that crippled the entire country took effect. But more importantly, as we have seen with the national unemployment numbers, unemployment is an outdated and nearly useless measure with which to measure actual economic performance of the private sector. The far more relevant numbers are the number of actual jobs in existence combined per capita income, which measures the extent to which the jobs that do exist are quality jobs. These are the exact figures that Republicans have used across the country to show that the Obama “recovery” is merely an illusory one created by accounting tricks – and that workforce participation remains low and that real household wages have stagnated or are actually falling.

The reality is that Louisiana has added a ton of jobs since Jindal took office – in fact, since 2008, they are the number 5 state in the country for job growth. Per capita income has also actually grown in Louisiana by 15% over the last 6 years, which far outpaces the national trend. There are more jobs in Louisiana now than there have been since 2008, and those jobs pay better. Louisiana’s GDP is growing at the third-fastest rate in the whole country, indicating that private sector health is remarkably strong. The main factor driving the unemployment rate is that Louisiana has experienced 7 straight years of population growth since Jindal took office, which would seem to suggest that from a public services and economic standpoint, Louisiana might not be the hellhole that the fainting brigade would have you believe.
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 Jindal appears to be taking a responsible approach to dealing with the budget.  The irresponsible approach would be a gutless tax increase that would stifle economic growth and lead to more government waste.  The discipline of cutting spending is an exercise in creating greater efficiency.  More states should try it.  I suspect that many of those people moving to Louisiana are moving from blue states that used the opposite approach.