In Louisiana’s Fiscal Crisis, the Louisiana Budget Project (LBP) reviews Governor Jindal’s recently released 2011 Executive Budget. The report finds that the Administration’s stated budgetary goal to “realign the size and cost of government to more sustainable, pre-Katrina levels” does not reflect the expansion of post-Katrina demand for government services.

While LBP agrees that reduced spending is necessary for responsible budgeting in a tight economy, LBP analysts highlight missed opportunities to balance budget cuts with new or recovered tax revenues that would better address the state’s fiscal crisis.

The Executive Budget proposes numerous potentially controversial cuts, including a proposal to eliminate state funding for stipends teachers receive for obtaining National Board Certification.  The $5,000 stipends, designed to improve teacher quality, are required by state law.  Cutting them from the budget, says LBP, would make them “an unfunded state mandate that districts must cover out of their budgets which, in many cases, are already stretched.”

The Executive Budget’s use of one-time tax-amnesty and FY09 surplus funds to partially offset billions of dollars in projected revenue reductions over the next year provides only a limited solution. More sustainable alternatives, they suggest, include closing certain tax loopholes, improved tax collection, and allowing use of “rainy day” and restricted funds under circumstances LBP sees as warranted by the ongoing fiscal crisis.