The managers of state government, facing a major financial downturn, are looking to save dollars in the smallest places. They are laying off student workers, cutting back on travel, dropping newspaper subscriptions and silencing on-hold music on the phone system (an improvement in my book). And they are not spending money they had planned to, by leaving job vacancies unfilled and canceling programs not yet started.
It gets worse in the coming year, when state tax revenues are projected to be 10 percent lower.
At the same time, however, state bureaucrats are drawing up wish lists of billions of dollars in major construction projects that could be underway before summer, including coastal restoration work, hundreds of water and sewer upgrades for local communities and miles of new and improved highways in every corner of the state.
What is wrong, or right, with this picture?
That may be revealed when the new president is sworn in next week and he and the new Congress set to make law of his proposed, though still largely unspecified, economic stimulus package.
The big hole in the state’s operating budget–other states have bigger holes–is largely caused by last year’s financial crash that might not have hit bottom yet.
Obama’s attempt to head off full-scale depression is to do what the federal government did not in 1930: pump billions of dollars into tax cuts and public works projects in order to jolt the economy back to moving and growing again. The question of will it work has been muted by the lack of ideas of what to do instead.
In terms politicians like to use to relate fiscal policy to real life, it’s like a family on hard times cutting back on vacations and dining out while also drawing up plans to add a game room and swimming pool, thanks to a gift from Uncle Stimulus, who borrowed the money. It may sound screwy to mom and dad, but what family would not cash the check, especially since Uncle Stim would just give their share to the cousins? Besides, a pool would make everyone feel better about eating beans and rice again tonight.
The president-elect has not shared his vision of how much of the $775 billion package (likely to grow once Congress gets it hands on it) will go to tax cuts, to expanded Medicaid and unemployment benefits and to infrastructure spending. But it’s the last part that has states busy assembling detailed lists of public works projects that, according to Obama’s conditions, are ready to turn dirt in 180 days, if not 90.
There is no shortage of such endeavors in Louisiana, where scores of major construction projects are designed, with rights-of-way and permits secured, just waiting for funding.
The Department of Transportation and Development alone has submitted a prioritized list of $1.1 billion “shovel-ready” projects. I-49 North tops the list, along with added lanes for Interstate 10s and 12 in Baton Rouge and Slidell, new bridges in Larose and Houma, preservation work on roads across the state and upgrades for transit systems, ports and airports.
Other agencies also have put in their requests, which, in all, amount to billions.
All this wish-list making, however, is disturbingly reminiscent of the state’s post-Katrina expectations of Congress, which were largely dashed. The difference this time is that all states are in the same lifeboat, which Washington can’t let sink.
Louisiana will not get all of what it seeks, but not for lack of asking or, apparently, readiness. DOTD Secretary William Ankner guesses this state’s share of the transportation pool will be less than half of what he’s asked for, but that $400 million or so–with no state match required–would be huge.
Whatever is in the stimulus package also might be all that Louisiana stands to get for the balance of this administration and this Congress, given its 39 percent voter support for the new president and its 6-1 Republican split in the House delegation.
All the more reason for the family to enjoy the pool and not ask what’s for dinner.