The prospect, bluntly stated in my last column, of allowing Louisiana’s insolvent small towns to simply fade away—rather than use a state taxpayer bailout to keep false hope alive—brought a swift reaction.
Those, like myself, who’ve never called home to a place where the population doesn’t top six figures, were just fine pulling the plug on decaying four- and five-figure hamlets like Bogalusa and Sterlington, arguing it’s the fiscally expedient thing to do in an adapt-or-die world.
Then there were those who either A) still cling to life in one of these insolvent towns, B) have idyllic childhood memories of glory days past, C) believe government spending can cure whatever ails you, or D) “have an actual heart,” as one emailer suggested.
Members of this quartet—after demonstrating an uncanny knack for employing the mother of all magic four-letter words—didn’t so much make the case for a rural renaissance, rather than transfer blame. A promised highway was never built. A canal didn’t get dredged. We built it (a baseball complex), but they didn’t come. Thanks, Obama.
Yet somewhere in the belligerent, zero shades of grey world that is social media, our website’s comments section and, to a lesser degree, email, those less than enthusiastic with my position did pause the expletives long enough to raise a valid point: Is the fiscal health of Louisiana’s big cities any better?
“Don’t be so smug,” wrote a dear friend who knows more than a thing or two about big-boy finances. “Our small towns are not that different, in terms of fiscal neglect and its related consequences, then New Orleans … and Baton Rouge is not far behind.”
Guess what? He’s right.
The financial management happening—or not happening—in this state’s larger cities is every bit as abysmal, and, in some cases, worse. (I’m looking at you, New Orleans.)
So why are smaller places like Clarence, Clayton, Jeanerette and St. Joseph in a death spiral—unable to pay the most basic of bills—while bigger places like New Orleans, Baton Rouge and Lafayette are not? Simply put, these semi-thriving metropolises, which aren’t shedding population and businesses at the same rate as their rural little brothers and sisters, still have enough tax-generating might to either overcome or shroud—depending on one’s perspective—deteriorating financial foundations.
Forget New Orleans and its fiscal follies, raise your hand if you think Baton Rouge city-parish government is the picture of financial good health.
Seriously, other than the parish library system, name a government agency that appears to have a clue about managing money. And I double-dog dare you to say the Mosquito Abatement and Rodent Control District.
True, city-parish government is able to pay its bills, but that’s about it. Even with an ever-escalating budget that’s pushing $1 billion, we never have enough cash to do much of anything significant without a plea for new taxes.
We can’t pay police more. We can’t maintain roads. We can’t fix bridges. We can’t synchronize traffic signals. We can’t expedite building permits. We can’t keep the grass cut. We can’t clear drainage canals. We can’t, we can’t, we can’t.
And when we ask why, the answer is always the same: An absence of money.
Hurl blame for this sad reality wherever you like. Tax-and-spend liberals. Tax-hating conservatives. A job-failing tax assessor. Dedicated taxes. An incompetent Metro Council. The Council on Aging. CATS, BREC or any of our other acronym-loving agencies. The downtown crowd. The St. George crowd. The north Baton Rouge crowd. Whatever crowd is running our shadow government. A mayor hell-bent on wealth redistribution through the awarding of city-parish contracts. Politically-connected, white-owned engineering and consulting firms who not only get all the work but do so at ever-escalating prices.
Does that about cover it?
Now, if we’re done, let’s get to the real problem: pension plans struggling under the weight of escalating costs and unfunded accrued liability.
Not sexy, I know, but the very thing that’s threatening to bankrupt 60-plus rural towns across the state is also what’s crippling the next great American city.
If you haven’t heard, Baton Rouge has one of the heaviest debt loads relative to its revenues of any municipality in the U.S., according to a September 2017 report from J.P. Morgan. Translation: Essentially 52 cents of every city-parish dollar are obligated to pay for unfunded pension liabilities, rising health care costs and an overload of bonded debt.
So alarming is the crisis, concludes the report, that over the next 30 years Baton Rouge faces the prospect of hiking taxes by 24%, whacking non-pension spending by 20% or demanding city-parish employees increase benefit contributions by … wait for it … 525%.
Granted, those horrifying facts and figures are just over a year old, and some in Mayor Sharon Weston Broome’s administration dispute several of the report’s findings, but even Marsha Hanlon—the city-parish finance director who can’t retire because, apparently, she’s the only person on the planet who can decode the mystery that is the Baton Rouge budget—acknowledges we have a problem.
“This is nothing new,” she told Daily Report shortly after the report came out. “I’ve been preaching this for years. We need to make changes to the way we do things.”
Good luck with that.
The very politicians responsible for this pension liability mess are loath to deal with it because doing so means angering pretty much every employee on the city-parish payroll. These folks also happen to be voters and few things scream “election day defeat” like messing with someone’s entitlement.
Even the mere suggestion of tinkering with retirement benefits tends to trigger a riot, with public-sector workers angrily declaring these lavish benefits are not only constitutionally guaranteed but are also a trade-off for working at below private-sector wages.
Of course, now we’ve got the heads of public works and the planning office complaining the only way to keep a competent staff is by keeping pace with the very private-sector salaries people are supposedly giving up in exchange for the fabulous retirement benefits we can’t afford to pay.
All the more vexing, the notion of grandfathering existing employees while adopting something resembling a private-sector 401(k) plan for new hires isn’t practical because the system needs every nickel from those actually working to cover the tab for those living the life in retirement.
So, what happens if we continue fiddling while our city-parish burns cash?
I don’t know, ask Bogalusa.