Louisiana residents may be in for a bit of a shock when they realize a financial truth.
The Bayou State receives more from the federal government than they pay.
For many that doesn't really come as a surprise, but for others maybe it does - who knows?
According to a recent WalletHub study, Louisiana ranks 12th overall in terms of 'federal dependence.' That's a combination of 31st in terms of individual reliance, which is the comparison between taxes paid in and direct benefit received, and 3rd overall in state reliance.
That third place ranking comes as the $29.6 billion (roughly) requires 46% in federal funding to make sure the checks don't bounce.
So that's roughly $12 billion in federal funding for state budgets, shored against $16 billion in income tax (per the IRS' data book) and $5 billion in refunds. That $12 billion from the government goes to fund things like Medicaid and infrastructure.
So, before any announcements of direct funding from the federal government from infrastructure projects - that usually passes through the state - Louisiana is already running a $1 billion deficit.
But wait, on Monday in Washington D.C. Sen. Bill Cassidy testified before the Senate, asking for them to adjust funding from the 'Great American Outdoors Act' (GAOA) to include coastal restoration projects.
Cassidy said that resotration of the Gulf Coast fit the mantra of the bill, which would use dedicated funds to help shore up maintenance deficits and improvements at federal parks throughout the country - trying to stimulate local travel and economies after COVID-19.
Where things get wild is the funding of the GAOA.The act would draw revenue from Gulf of Mexico energy revenue, among other sources, but the vast majority of funds would come from the Third Coast.
$4.3 billion, to be exact, nearly 90%.
On the other hand, coastal states would only receive $7.53 per capita, while inland state parks would receive $17.66 per capita.
Now, the GAOA is a one-off act to try and spur some economic activity at national parks, while giving the folks the opportunity to travel locally and continue to social distance. But it's a symptom of a larger problem - fiscal responsibility at the federal level is a joke.
Before we jump into the numbers, it's important to note that Sen. Cassidy is doing his job by seeking those dollars be balanced between coastal and inland states, especially since coastal states are footing most of the bill.
But, as has been discussed previously, mismanagement of funds at most governmental levels is nothing new.
Federally, the deficit continues to grow and the country continues to borrow with very little oversight or conventional conversation surrounding those financial decisions.
Will someone step up to settle the score? Doubtful.
And yet acts upon acts will continue to pass that have language written as such - wherein funded projects may draw revenue from streams not their own.
Make no mistake, even if the GAOA isn't changed Louisiana will benefit somewhere else.
At the state level, fluff makes it into every state budget, and yet we are leveraged highly in government backup.
Louisiana is ranked one of the worst in the nation with regard to GDP and taxes versus reliance on the federal government.
Both were ranked 'low' while reliance was ranked 'high.'
The most balanced state, ranking 50th, was Kansas for those who are curious.
Kansas has roughly half the population of Louisiana, and their annual budget is also roughly half that of the Bayou State. The corn state also exceeds median income by $10,000, or $57,000 versus $47,000 in Louisiana.
So at a state level, Louisiana residents have to face the fact that poverty affects the budget in a big way - but finding ways to trim fat and cut expenses just hasn't risen to the top - at least not yet.
Then, look locally. In 2017, Livingston Parish skipped a year on their road program to save money for a grant to expand the program in 2018 and 2019.
The payoff worked, but 'expand' meant the bare minimum of what would normally be required, anyway.
When the original Master Plan was released in 2013, the recommended amount of money necessary - per year - for the parish to keep up with road maintenance was $13 million.
That was seven years ago. The grant money that came for 2018 and 2019 provided roughly $15 million per year. To be clear - this was great news for the parish because it allowed them to expand the program beyond the normal boundaries, which amounted to about $1.5 million a year ($6 million total, minus $4.5 million for debt service).
The grant was federal, by the way. So it was a good move by the parish to prusue that money.
But in the end, it's not enough and the parish can't apply for grants every year.
Fiscal responsibility starts at the bottom level, as eventually that's where the money lands. It's not necessarily about raising taxes, either, but finding an efficient way to spend current dollars.
Take the Department of Transportation and Development, for example. The most recent, proposed increase in the gas tax was supposed to generate $500 million per year. (A rough estimate)
However, Louisiana residents were informed that the department was already $30 billion behind on maintenance and projects - what made DOTD think that the proposal would work? Instead of trying to find new and efficient ways to bite off pieces of that backlog - giving rise to the $500 million causing things to go faster, not as a 60-year catchup mechanism - and guaranteeing the money would be used only for infrastructure.
You know... to ease the concious of those voting on it?
But the people spoke, and the bill to increase the gas tax never made it off the legislative floor.
Governments are going to have to start taking financial audits seriously and making difficult choices as to what gets funded and what doesn't - especially at a local level.
Because without responsibility here in Louisiana, who's to argue when the federal government points out that Louisiana receives more benefit than it pays, and since the federal government has run wild with expenditures, opening the door for tons of foreign investment, and barrels ever closer to either default or a complete overhaul of the financial system.
If the government pulls out, or at least balances the scales, that's at least $1 billion of the top that leaves the state.
If they have to pull out more? Then the Bayou State will face more trouble that it already has, and will never be the same.
J. McHugh David is editor and publisher of the Livingston Parish News.
