Calling Governor Bobby Jindal on the carpet: Where did Louisiana’s new jobs come from?

The Lousiana State budget gets over half its operating budget from grants from the Federal government. Though unlcear, this budget does not appear to include the additional continued acceptance of Federal aid which is managed by the Lousiana Recovery Authority, LRA.

President Barack Obama gave his first unofficial state of the union speech last night, inspiring hope and optimism among the citizens of the United States of America amidst the largest economic crisis since the Great Depression of the 1930’s. The speech was moving and I felt proud to be an American and proud to have elected such an intelligent leader who I am confident will help us recover from eight years of poor government management.

The Republican party chose Louisiana Governor Bobby Jindal to deliver the Republican response. The entire speech can be found on his official website.

The following morning, Governor Jindal boasted on NBC’s Today show that while the rest of the country is in an economic meltdown, his fine state of Louisiana does not need help from the federal government and that he plans to refuse millions in stimulus money intended for his state. “We are the only state last month that added jobs in this country," says Jindal. "We’ve continued to outperform the national economy. We’ve done it in part because we’ve cut taxes. We’re going to continue to do that.”

Wait a second! Let’s back up a minute.

LOUSIANA STATE GOVERNMENT GETS OVER HALF ITS REGULAR BUDGET FROM THE FEDERAL GOVERNMENT

Jindal claims that Louisiana was able to cut business taxes six times since he’s become governor. So, where is the money coming from to run the state government?

Currently, Lousiana now gets most of their operating money from the federal government.

The government for the state of Louisiana currently receives over half of its operating budget, $15,820,733,731 to be exact, of its nearly 30 billion dollar budget per year from federal grants. This amount is disclosed on the official Louisiana Treasury website.

MORE THAN KATRINA?

One of Governor Jindal’s criticisms of President Barack Obama’s stimulus package is that it costs more than the relief money spent after Hurricane Katrina. 

About $116 billion in hurricane relief had been spent by mid 2007 to aid those affected, the majority spent the first few months after the storm and $35 billion set aside for long term rebuilding projects. Although a small amount was spent in other states, the majority was spent in Louisiana. (Blueprint for Gulf Renewal, The Institute for Southern Studies report)

According to infoplease.com, the population of Louisiana is 4,468,976 and the pre-hurricane population of New Orleans was estimated at 454,863. At $116 billion, this amounts to $26,000 in relief money per every man, woman and child in the state of Louisiana.

The United States of America boasts a population of 303,824,640 as of July, 2008 according to the CIA website. This makes Obama’s stimulus plan of $787 billion seem like a bargain, costing only $2,590 per every man, woman and child in the United States of America, less than 10% of what was spent per person on Katrina relief.

LOUISIANA, A PERFECT EXAMPLE OF HOW WELL FEDERAL STIMULUS AID CAN HELP

Is Governor Bobby Jindal really claiming that Louisiana’s exponential employment growth has had nothing to do with help from the federal government? 

Not true! If anything, Louisiana is the perfect example of how the federal government can help create jobs and stimulate the economy after a crisis. Rather than pretend his state has had no help from the feds, Governor Jindal should boast about how well his state has managed stimulus money in the form of Federal disaster relief. Most of the hard work occurred before Governor Jindal took office only a year ago in January 2008.

On August 29, 2005, Hurricane Katrina plowed into the state of Louisiana. Homes and businesses were destroyed and flooded. Residents evacuated in a mass exodus. FEMA, the Federal Emergency Management Agency, swooped in to help where they could. Granted, FEMA could have done a better job. However, the State of Louisiana would now be in ruins if federal tax dollars hadn’t rescued it.

Hurricane Katrina caused a total of $89.5 billion in damage. However, by early 2006, the Bush administration had already funneled about twenty percent more than that, $105 billion in federal dollars, primarily into the state of Louisiana to rebuild (April 1, 2006 article Boston Globe) and $11 billion more for an estimated total of $116 billion since 2007 (Blueprint for Gulf Renewal report). (I was unable to find figures for money allocated after that date, but money is still coming in according to the Louisiana Recovery Authority, LRA website.) Federal money wasn’t just given to the local government. Louisiana based charities, private businesses, residents, and property owners were also given a helping hand by the government.

A quick look at the official State of Louisiana Treasury Department website is all it takes to find out how much federal government money is funneled into the formerly hurricane ravaged state. Click on Bond Commission and you will see a list of federal stimulus projects already set in place during the Bush administration.

There are the $7.9 billion “Tax-exempt private activity bonds (Gulf Opportunity Zone Bonds, or GOZA, of 2005),” which award low interest loans to qualified businesses “in order to rebuild.” GOZA allows private businesses to borrow money at cheap, tax-exempt rates of interest.”

According to a treasury report, $400 million in federally backed bonds were sold to the private sector to help cash strapped city governments and agencies in Louisiana raise capital to continue operations after hurricanes Katrina and Rita.

Federal money has also funded business grant programs headed by the State.

The Lousiana Recovery Athority, or LRA, formed in October 2005 after Hurricanes Katrina and Rita struck the state, is a government agency designed to manage Federal money intended for rebuilding after the storm. On their website, the LRA lists projects they have funded and Federal monies they have received to pay for these projects. Under “Frequently Asked Questions,” the LRA lists about $15.1 billion in Federally funded projects to rebuild or repair roads, housing, infrastructure, schools, and levees; plus debris removal and hazard mitigation.

However, the lists of projects also includes $10 billion for community development (CDBG), which in part funds economic development programs.

$350 million was given in grants and loaned to small business owners.

$27 million was given to fishermen to help the ravaged fishing industry.

In this list, only $10 million in aid has come from private donations. The rest has come from the federal government.

One of the LRA’s task forces is the “economic and workforce development” committee. The website states: In the months after Hurricane Katrina, the state saw a 766 percent increase in initial unemployment claims and paid out more than $1 billion in unemployment insurance and disaster unemployment assistance benefits to 300,000 applicants. By February 2006, the committee and LRA had developed long-term priorities to provide financial assistance for businesses by attracting qualified workers, revamping the state’s tax structure, helping to start or grow companies, and create high paying jobs.

The LRA and Economic Workforce Development committee also strives to “develop new industries that take advantage of rebuilding efforts and regional resources and create high quality jobs.”

The LRA boasts that due to their efforts, within two years of the storm, Louisiana had climbed back to within 3 percent of it’s pre-storm employment. Where did this money come from to create jobs? It didn’t fall off a truck. It came from and still comes from the federal government. Even the operating budget for the LRA appears to come from the federal government for it does not appear on the Louisiana state treasury budget.

Why, after Louisiana claims so much success, does the state of Louisiana still need to get over half their operating budget money from the federal government? Why do they need the additional funds for rebuilding funneled through the LRA? Perhaps it’s time to cut the “hurricane recovery aid” off completely.

But, is Jindal speaking out of both sides of his mouth?

From Jindal’s own speech:

“We are grateful for the support we have received from across the nation for the ongoing recovery efforts.”

Budgeting by carrying only cash — An experiment in self-controlled spending

For the first time in about twenty years, I went on vacation with just cash in my pocket: $500 for 5 fun-filled days in New Orleans over the Thanksgiving holiday. I picked the amount of $100 per day arbitrarily out of a hat. I had no idea if it would be enough for both my husband and myself, and if not, if I’d be able to resist the urge to pull out the “plastic.” We had a free place to stay at my Cousin Carla’s house, so we only needed to cover meals, entertainment, and souvenirs.

I haven’t lived on a cash budget since college in the late 1980s, when I took $20 out of the ATM every week and spent it until it was gone. My boyfriend at the time took up the slack, treating us to dinner out at restaurants with his weekly allowance of $40 from his parents (I had to work for mine).

In those days, neither of us had a credit card and couldn’t have gotten one even if we wanted. Credit cards weren’t given out nearly as readily as they are now, which was a good thing. I didn’t qualify for a major card until I was out of college, working full time, and only after building my credit score by successfully managing an account from a major department store (JCPenney) for a little over a year.

The cash method is a tried and true method of budgeting, still practiced by those who don’t trust putting their money in a bank. I’ve known many a man who turns his paycheck into cash every Friday, then pays any bills that are due before blowing the rest by having fun going out over the weekend. By Monday, he’s nearly broke and living off a tuna fish, frozen vegetable and macaroni and cheese casserole until the next paycheck arrives.

My husband and I loosely follow the cash method of budgeting with our weekly lunch allowances. However, this was the first time either of us had tried to follow a budget on vacation, a time when I tend to live high on the hog, then pay the price when I return home after racking up hundreds of dollars on my credit card.

To make the budget work, we didn’t include filling up the car with gas. First, there was no telling how much gas would be since prices yo-yo up and down like a bungee jumper from day-to-day and vary from station-to-station, as well as from city-to-city and state-to-state due to locally imposed taxes. Second, we had to have gas, so running out of money to pay for it was not an option.

The first road block to staying on budget occurred on the way to Louisiana. My car overheated in Tallahassee and my husband and I and the nice man at the Costco gas station couldn’t find any busted hoses, mostly because it was raining buckets and water was everywhere. Everyone we surveyed expected that the thermostat had gone bad, a cheap fix. I had to get a tow, but expected it to be free through my new AAA membership. It wasn’t — only the first five miles were free and the rest were charged at $5 per mile.

Cha-ching! Tow at $20.

I have a reasonably new car, still under partial warranty, and only felt comfortable getting work done by a licensed dealer. The repair shop found the problem right away – critters eating the hoses, probably squirrels – no kidding! Although many gnawed hoses could wait, the one to my radiator had to be replaced. (I got to keep the old hose with the gnaw marks for proof — knowing no one would believe me.)

Cha-ching! Dealer repair at $267

Unfortunately, the repair shop didn’t keep parts in stock and had to order them. It would take a day to repair, so we had to stay overnight at a hotel where the dealer got us a discounted room.

Cha-ching! Hotel room at $44.

Including meals, we had now spent $378 of our $500 budget and we hadn’t even made it to New Orleans, yet. Bah humbug! We had no choice but to break the budget and go to the ATM for more cash, a small portion of which we would use to pay for meals on the trip back home. This left us roughly $65 per day for two fun-filled days in New Orleans.

The details of how we spent the money will completely bore you. However, the attitudes of the people around us who we informed of our “daily budget” were both surprising and unexpected.

My cousin Carla watched with amusement our regular habit of pulling out our cash to see how much we had left. It didn’t sink in that we were serious about following our budget until we were nearly out of money that first night. “I would just use plastic,” she kept saying.

“Normally we would. But, that’s what gets us into trouble,” I explained. “I just paid off the credit card with my non-FDIC insured money market, since I had to close it out anyway.” Although there was nothing to stop us from racking up the credit card again, we decided we’d rather save the “plastic” for emergencies.

My cousin’s boyfriend, Ricky, was disturbed by my husband’s public display of cash. “You’ll get robbed. I know this town,” he warned. “Promise me, you’ll never do it again.”

“Okay, I won’t,” my husband promised and agreed to count his money inside his wallet, under the table. He wasn’t used to paying with cash and is very trusting.

“I’ll pay for it. Don’t worry about it,” said Ricky.

“Save it. You’ll need money tomorrow,” said my cousin Carla.

However, our goal was to spend all our money by the end of the night. The next day, we would start fresh with our next day’s budget. I didn’t want to be a leech, but agreed to let my cousin’s boyfriend pay for dinner because he really wanted to impress us and treat us to something nice. We would make up for it by buying their drinks the rest of the night until the money ran out.

The next day, when my cousin called her boyfriend to discuss the plans for that night, we heard her sigh and say, “They’re doing the money thing again.”

The money thing? Since when is budgeting with cash considered unusual and odd?

That afternoon, we met up with one of my husband’s friends from work with his wife, also in New Orleans for the holidays. We treated for brunch at the Café du Monde, which sells an affordable small cup of coffee for $2 and a decadent pastry called a beignet. The total cost for the five of us, plus a souvenir mug, was only $25. We mentioned to Carla that we had $40 left of that day’s budget, enough to pay for her parking and for the three of us to eat dinner at a sandwich shop we’d passed the day before.

What we didn’t anticipate was that my husband’s friends, who overheard us, assumed that we are hard up for cash. “We aren’t,” my husband tried to explain. “We’re just on a budget.”

At work the next week, the friend insisted on buying lunch for my husband, still under the impression that because we are limiting our spending, we must be in financial trouble. The friend is in his mid 20s and has carried a credit card since his teens. The concept of voluntarily limiting spending has never occurred to him and his young wife, who buy nearly everything on credit.

Although our budget did cause some awkward moments, we’re laughing all the way to the bank. I just balanced my checkbook and we actually saved a small amount of money last month despite going on vacation (a challenge after grocery prices and utilities went up this summer).

I only wish I’d used the same method of paying in cash to buy Christmas presents — I’m already over budget!