COLUMNS

Despite job growth, midyear cuts expected for La.

DERON TALLEY, EDITOR @DeRonTalley

Earlier this month, the Louisiana Economic Development highlighted the state’s significant rise in the Forbes’ ranking of Best States for Business. Louisiana is tied for second most improved state in the country since January 2008.

Ranked no. 49 in 2008, Louisiana now stands at no. 29 in the U.S., improving 11 spots in the Forbes ranking from last year and 20 spots since 2008. Louisiana now ranks higher in every national state business climate ranking than it ever did prior to 2008.

The state’s dramatic improvement in the Forbes ranking stems from several significant category gains. Over the past seven years, Louisiana’s ranking in the business costs category has climbed from no. 22 to no. 6. Louisiana’s regulatory environment has risen from no. 41 to no. 26 and the state’s economic climate has risen from no. 43 to no. 15, over the same period. Over the seven years, Louisiana’s improvement in the Forbes Best States for Business report ranks no. 2 in the U.S.

However, contrary to all the success in business, Gov. Bobby Jindal's administration will have to make midyear state government budget cuts based on recent tax collection projections.

Midyear budget cuts have come to be the norm during the Jindal administration, having been needed in six of the seven years he's been in office.

The state Revenue Estimating Conference, a panel that oversees the state's income projections, expects a $171 million shortfall in Louisiana current year's tax and fee collections, which will lead to reductions in spending. Other recent midyear shortfalls have typically been between $100 million and $200 million.

Jindal and his office have been everything but shy when it comes to making the bulk of their cuts from health and higher education, but I’m hoping they stay away from it this go around.

The Jindal administration says it will look for other ways to reduce costs that don't include cutting programs or laying off state workers. Jindal had already placed a freeze on certain types of travel, supply purchases and other expenditures that he hopes will produce savings.

The downturn in revenue is due mainly to sluggish income tax collections as well as lower oil prices with income taxes making up one of the largest sections of Louisiana's state government revenue.

In spite of all the growth we’re seeing economically, the state is still having a tough time holding its money. The biggest misconception of it all is that the jobs are coming in, but where is the money going?

Blessings