Yesterday's New York Times says the party is over in Louisiana.
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.
Read the rest of the depressing story here.