For Louisiana, Bons Temps Proved All Too Brief
by ADAM NOSSITER (excerpt)

NEW YORK TIMES

NEW ORLEANS — Six months ago, it was springtime in Louisiana, dollars were raining in from high oil prices, and the tax cuts and highway spending couldn’t come fast enough in the euphoric Legislature.

But now oil has plummeted and the joy is gone in a poor state that for a time seemed insulated by natural resources from the national downturn. The budget cuts — big ones — are about to begin.

In Louisiana, the oil-drunk always ends badly. This time, though, the political stakes are bigger than in the past, as the Republican Party’s national pinup, Gov. Bobby Jindal, has to absorb the brunt of the state’s abrupt shift in fortunes. After glorying in the largess earlier this year, Mr. Jindal has gone to issuing sober news releases about hiring freezes and the new austerity.

His fate is tied as much as anybody’s to Louisiana’s overdependence on oil. Severance taxes, mostly from oil and gas, made up just over 8 percent of state tax revenue in 2007, according to Census Bureau data, much less than Alaska’s 64 percent, but higher than Texas’ 6.9 percent. The total take, including royalties and leases from oil, gas and other resources, accounts for just under 17 percent of the Louisiana budget.

But while the leading good-government group here, citing that addiction, warned last May against the Legislature’s plan for a $360 million income tax cut, Mr. Jindal called the tax break “terrific news” and happily signed it into law as legislators cheered.

Admonitions on fiscal prudence went unheeded, as they have so often here, and the bill is now due. Earlier this year there was an $865 million surplus; now Louisiana has a $341 million shortfall in its current-year budget, and next year the projected deficit is $2 billion. It joins 43 states with current and forecast budget gaps in the reckoning of the Center on Budget and Policy Priorities, a Washington research group.