Governor Edwards Must Cut Spending Now—No New Taxes!

It would appear newly elected Governor John Bel Edwards has yet to see a tax he does not love. Rather than manage excessive spending, cut waste and set Louisiana’s house in order we are threatened with higher taxes. Why not cut spending?

Louisiana’s FY 2015/2016 budget was approved by legislators for $24.6 billion. An estimated revenue shortfall of roughly $750 million is expected to arrive by June 30, 2016 with current deficit spending around $500 million. Obviously, the spending cuts were not deep enough. A 3.1% across the board spending cut, effective immediately, would generate $762 million and balance the budget. As for the FY 2016/2017 budget, additional cuts of roughly 7% across the board are necessary, accompanied by targeted budget cuts against waste, fraud and mismanagement. 

According to Louisiana’s State Treasurer, John Kennedy, it appears that there is ample waste and mismanagement with room for serious reforms:

We have 19,000 consulting contracts. Does anyone really believe we need all of them? Does anyone believe these consultants wouldn’t give the Governor and the Legislature a 5% discount if they asked? Twenty-two percent of all of the managers in the state’s classified service manage one employee. The average manager manages four employees. We have too many generals and not enough foot soldiers. Each year, taxpayers pay for 900,000 visits to expensive emergency rooms for non[-]emergencies, such as acne, mild sunburns, obesity counseling and pregnancy tests. Imagine how much money we could save if we reduced that by 20%. According to the Federal Centers for Medicare and Medicaid Services, 10% of the $8.3 billion the state is spending on Medicaid is fraud. That’s $830 million of fraudulent payments every year.

                                                                             John Kennedy

Louisiana’s budget has grown from $17.5 billion in FY 2004/2005 to a bloated 25.6 billion in FY 2014/2015. That is roughly an $8 billion or a 32% increase in 10 years. Moreover, rather than making responsible cuts in the past few years when State revenues began tapering off, legislators began depleting the Rainy Day Fund to continue the irresponsible spending, waste and mismanagement. Now they are demanding taxpayers pay higher taxes to fund an out of control tax and spend policy. Legislators need to get their act together and start behaving as responsible managers of our finances. 

Historical Data Exposes Excessive Spending 

The chart below reveals Louisiana’s population is basically unchanged over the past 10 years. During the same period the U.S. inflation rate increased on average 2% per year or 19.68% overall. To keep pace with inflation over the same 10 year period our $17.5 billion FY 2004/2005 budget should have only increased to $21.35 billion (compounded at 2%) for FY 2014/2015. Therefore, inflation rate adjusted, we were about $4.15 billion over budgeted for FY 2014/2015. Factoring in the 1.49% 2016 inflation rate, our FY 2015/2016 budget should have only increased to $21.66 billion, instead of the current $24.6 billion which is roughly $2.94 billion of excessive spending. In short, we are budgeted to spend about $7 billion above the inflation rate in just 2 years (2014-2016) for basically the same population of 4.6 million. Clearly, we are out of step with reality and spending more than is necessary or justifiable.

We are currently budgeted (2015/2016) to spend $5,347 per capita on 4.6 million Louisiana residents compared to $3,804 per capita just 10 years ago, a 29% increase or $1,543 more on about the same population. Inflation adjusted, we should realistically be budgeted to spend $4,708 per capita for FY 2015/2016, a difference of $639 per capita or $2.93 billion more than we should be spending.

Edwards and Darden are projecting a $750 million short fall this year and $1.9 billion short fall next year, totaling $2.65 billion in over budgeted spending. As demonstrated above, we are over spending and need to reel in this egregious behavior. If the electorate fails to hold these Baton Rouge rascals accountable we will be forced to pay higher taxes that we cannot afford. The only real cuts will come from our paychecks as legislators tax and tax and tax you into poverty.

State Treasure John Kennedy has cited highly suspicious spending that represents billions of dollars in possible waste and graft. Something is seriously wrong and there needs to be an independent investigation. Louisiana convicted 403 public officials in the past decade, according to the Justice Department:

Louisiana has emerged as America’s most corrupt state with the highest rate of convictions for people in public office, official figures revealed this week.

                                                                                     Daily Mail

Louisiana state government has 19,000 consulting contracts, according to a Legislative Auditor report issued in May of 2015. More than 4,500 of them are “off the books” and not even reported to the Office of Contractual Review.

                                                                                 John Kennedy

As stated above, the current FY 2015/2016 budget should be roughly $21.66 billion, not the current $24.6 billion. Neither inflation nor population growth is responsible for our budget woes—legislators are. The real problem here is an insatiable desire to grow government by liberal socialist tax and spend democrats and a few greedy republicans. Plain and simple, cut spending across the board 3.1% now and 7% to 8% next year. Many Louisianans are sick and tired of hearing “we must raise taxes.” When are we going to hear and see legislators pounding the table saying, “we must cut spending?”

Some have argued that taxpayers should pay higher taxes rather than cut spending, but is that fair? Is that right? 

Louisianans should not have to take a pay cut in the form of higher taxes to fund this out of control budget. We cannot keep silent! It is immoral to punish taxpayers and demand they pay higher taxes because of irresponsible spending, waste and mismanagement by legislators. Louisiana’s passive electorate needs to wake up and call their legislators, send a letter or email and demand fiscal responsibility.

Lack of competent leadership is obviously ubiquitous in Baton Rouge. We have elected politicians that do not posses leadership skills. Slick election campaigns have duped the public into hiring the wrong managers who care more about protecting the special interest while taxing us with an egregious debt that we cannot afford.

The Governor’s proposed tax increases places an unnecessary burden on cash strapped hard-working Louisianans. This is not leadership. This is not management. This is a tax and spend liberal socialist democratic nightmare that will rob the average person of their hard-earned income which we cannot afford to fork over to sustain the irresponsible spending, waste and mismanagement. 

We do not have the funds to spend, so cuts are necessary until oil recovers from its unsustainable current lows of $33 a barrel for WTI Cude. We can fully anticipate the Saudis and OPEC will shut in wells and turn off the spigots to drive prices north of $75 per barrel before too long.

According to ReutersGoldman Sachs analyst sees a recovery ahead in oil:

“We view the oversupply as continuing well into next year before rebalancing in the fourth quarter 2016,” Goldman Sachs said in a report circulated on Tuesday.

Take a look at the chart below. WTI Crude is trading at a 12 year low.
oil graph

We are probably 8 or 9 month out from a recovery, but until then we need to reduce spending, not raise taxes. If you raise taxes to fill the budget hole and oil revenues climb higher, you create a cash surplus. Will that surplus then be refunded to the taxpayers that were forced to pay higher taxes? Not a chance. It will be absorbed into a new and higher budget. Putting excess millions into the hands of tax and spend politicians can be like asking the devil to watch your wallet while you step out the room.

WTI Crude hit a 12 year low of $27.56 on January 20, 2016 and rebounded to 33.74 on Friday, January 26, 2016. The chart above indicates a capitulation has occurred in the past 6 days and the selloff is nearing an end. Amidst volatility the price will gradually rise, but a double bottom around the $27 range is possible. In the meantime we must reduce spending, not raise taxes.

Just a few years ago oil was trading above $100 per barrel, now it’s $33. This sharp decline contributed to the budget deficit both directly and indirectly. When oil was trading at the high-end of the chart the annual budget grew from 18.7 billion in FY 2004/2005 to 25.6 billion in FY 2014/2015.

Well, the party is over for now. It’s time to cut back the excessive spending and not burden the tax payers with higher taxes to support a lifestyle we neither need nor can afford!

Legislators need to distinguish themselves by stepping forward and voting to cut spending.


your voice plain

Contact your legislators today!

State Representatives email.

State Senators email.



  1. Steve says:

    We have too much government. Decrease the spending and size and you will balance the budget.


Leave A Comment

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s