A new era of fiscal discipline
By: Bobby Jindal
For decades, Louisiana has been subject to out-of-control spending – looking for ways to spend your hard-earned money to create new programs, waste it on pet projects, and dedicate other monies to put a future burden on taxpayers.
Just last year, more than 1,250 state jobs were created in the state’s largest ever state budget. This has served to increase our state’s bureaucracy without investing in its future. This is not fiscally responsible and is reminiscent of the old Louisiana mindset that has hampered reforms in the past.
In the New Louisiana, we are introducing a new era of fiscal discipline by eliminating wasteful spending that does not address our state’s priorities. We must resist the temptation of the past to spend available money immediately, choosing instead to invest and plan wisely for our state’s future.
During my time as Secretary of the Louisiana Department of Health and Hospitals (DHH), we enacted reforms that eliminated hundreds of millions of dollars in fraud and waste from DHH programs, even as outcomes and services improved. We must now do the same throughout state government. If we do not take care of our budget now, future generations will be left with even greater financial problems.
We have focused on six areas of fiscal reform that are getting our state spending under control and giving us more flexibility to invest in priorities for our state’s future. As a result, we submitted a budget that reduces spending by $4.2 billion - or 12 percent less - than the current budget, eliminates 1,465 unnecessary state jobs, cuts wasteful spending, and uses surplus dollars to fund necessary one-time spending projects throughout the state. This was all done while still giving teachers a $1,000 pay raise to keep them at the Southern regional average and investing more money on our roads.
The first area of reform is cutting burdensome taxes and giving taxpayers back their hard-earned money.
Taxpayer money is not an open checkbook for government to spend at will, and I am a firm believer people can spend their money better than government. That is why I am getting ready to sign the sixth tax cut we have passed since January. This sixth tax cut is the largest income tax reduction in state history by way of removing the burdensome Stelly Tax.
The second area of fiscal reform is restricting any new construction projects from being added to the state budget until the current projects are completed and investing our money wisely on the state’s true priorities. This will aid in ridding the $1 billion plus backlog of projects we inherited and will take four to five years to clear, institute controls and limits to ensure out-of-control spending does not recur in the future and ensure we are spending taxpayer dollars on priority projects.
We have put forth reforms to the Capital Outlay process, otherwise known as the state’s construction budget, that will ensure all projects are in line with state priorities.
By reforming this process, we can prevent the type of reckless spending that has been seen at the federal level, where millions of dollars have been allocated to projects such as the $220 million bridge to nowhere. That must end at the federal level and will end here in Louisiana.
The next area of reform puts in place a review process to make sure our money is not being wasted to bankroll non-governmental groups.
Last year, for example, millions of dollars in state surplus were given to non-governmental groups to spend however they like, often with no accountability in place. I have issued strict criteria to the Legislature that any funding for non-government projects that is not openly addressed during a legislative session, does not meet an identified state priority, or fails to fully disclose the origin and purpose will be vetoed.
The fourth area of reform is demanding fiscal discipline in current and future spending by not spending one-time monies on programs with yearly costs, as this is like using your credit card to pay your mortgage.
This is in contrast to last year, when $800 million was spent with one-time monies for projects that had a yearly price tag. And by choosing to save newly-recognized revenues, instead of wasting them on another spending spree, we will completely eliminate this unhealthy reliance on one-time money.
There are several bills currently under consideration before the Legislature that would establish constitutionally mandated expenditures or special legislatively dedicated funds to certain projects. Let me be clear -- I will veto any legislation that forces the state to fund new specific projects on a yearly basis.
We should not be creating any new legislative mandates that lock in state spending for certain projects and in turn lock out choices for budget savings. Too often, politicians in years past have wasted money on these projects only to later threaten drastic budget cuts to critical health and education programs or raise taxes when revenues fall short. We must save and invest for the future; we cannot spend our way toward fiscal responsibility or budget savings.
The importance of fiscal discipline and saving has never been of greater importance to the future of Louisiana. Despite recent increases in state revenue from record oil prices and recovery-related income and expenditures, economists expect these conditions will soon level out, resulting in a projected deficit by the year 2010.
The fifth area of reform involves being responsible for the investments that have already been made by maintaining facilities at universities, paying down debt in the state’s pension debt and using money as taxpayers had intended.
By using one-time funds, we have invested $75 million in deferred maintenance at our higher education systems, so teachers and students alike have adequate facilities to learn and do research. We have also used $60 million to start paying down a portion of our state’s pension debt, helping to ensure our teachers and state employees are able to retain the pension they have been promised. For every dollar we invest today in paying down this pension debt, the state will save $4.28 in interest in the future. And finally, we have made certain transportation taxes and fees, such as vehicle registration, go towards transportation needs and not into the black hole of the general fund. This will allow us to double our spending on roads and infrastructure without raising taxes.
The final area of reform involves giving taxpayers more transparency on how their money is being used.
We are creating a new online database of state government spending, allowing taxpayers to see how their money is being spent and greatly increasing the transparency and accountability of state government. This promotes greater accountability for how dollars are spent and will help ensure that investments are targeted to those critical areas that aid recovery and bring demonstrated results to all Louisianians.
As governor, I recognize that one of my greatest responsibilities is to ensure our money is spent responsibly and in a way that promotes short and long-term economic growth. By doing so, our New Louisiana truly will become a place where our children can pursue and realize their dreams.