Bobby Jindal’s Troubles at Home: What he’s not talking about on the campaign trail
February 6, 2015
The article originally appeared in Politico
by Tyler Bridges
Gov. Bobby Jindal has a plan: Do for the country what he’s done for Louisiana. Cut taxes and cut the government workforce and the economy will bloom, he promises. It’s a message he’s peddling as he lays the groundwork for a presidential run. Indeed, as Jindal is quick to say, private-sector job growth and the economy in Louisiana have outpaced the national average during his tenure as governor. “I’m a fiscal conservative,” he told the influential Conservative Political Action Conference last year, in explaining these successes.
But here’s what Jindal doesn’t say: Louisiana’s budget is hemorrhaging red ink, and it’s getting worse. He inherited a $900 million surplus when he became governor seven years ago, and his administration’s own budget documents now show the state is facing deficits of more than $1 billion for as far as the eye can see. There are no easy solutions today because Jindal has increasingly balanced the budget by resorting to THE FRIDAY COVER Bobby Jindal’s Troubles at Home What he’s not talking about on the campaign trail. By TYLER BRIDGES February 05, 2015 Lead image by Getty. one-time fixes, depleting the state’s reserve funds and taking money meant for other purposes.
“There are all kinds of tricks in the budget,” said Greg Albrecht, the state legislature’s chief economist, a nonpartisan position. Meanwhile, the state’s unemployment rate has risen from 3.8 percent when Jindal took office, a point below the national average then, to 6.7 percent today—nearly a full point higher than today’s national average. Jindal omits these inconvenient facts when he bashes President Barack Obama and Washington for “bankrupting” the federal government and mismanaging the national economy. As the son of Indian immigrants who was a Rhodes scholar, Jindal, 43, has stood out as a national GOP star since his 2007 election as chief executive of Louisiana, with an image invariably described as wonky. In 2009, he was chosen to give the GOP response to Obama’s State of the Union address, but his unnatural singsong delivery was mocked. Since then, he’s back to fast talking and reeling off numbers while he courts Republicans outside of Louisiana. A year before the Iowa Republican primary, he has shifted his political emphasis by making an obvious pitch for religious conservatives, highlighting his faith and following up the recent attacks by Islamist extremists in Paris by denouncing supposed Muslim no-go zones in European cities. Some commentators ridiculed him, but Jindal won attention on Fox News and CNN as well as the approval of some conservative pundits.
Yet one topic thus far has garnered little national attention: His economic record in the Bayou State.
Democrats in the state are quick to point to the budget problems. But what’s striking are the harsh critiques from fellow Republicans, who say Jindal’s presidential ambitions and frequent campaign trips outside of Louisiana have taken precedence over managing his home state’s economic affairs. “I’m hoping he will multitask and spend some of his time with us,” said state Treasurer John Kennedy, a Republican. “I’m a numbers guy. We have serious, serious problems with our budget. For seven years, we have spent more than we’ve taken in.”
Republican state legislators are particularly scathing in saying Jindal no longer exercises leadership, but they don’t want to go on the record for fear of losing their choice committee assignments or having the governor kill their pet projects. (A governor in Louisiana has so much power that he appoints the speaker of the House and the president of the Senate, along with committee chairmen.) Jim Richardson, an economist at Louisiana State University who sits on a four-member board that determines the state’s available revenue, predicted that next year’s governor— regardless of party—will have to call a special session on the budget, as the first order of business, to clean up what Jindal has left behind.
The deficit for the upcoming year adds up to $1.6 billion, too big to close easily. Jindal will show his hand when he releases his plan for a balanced budget on February 27, amid heightened attention because of his obvious national ambitions.
In a telephone interview from Florida, where he was speaking to a conference of religious CEOs, Jindal blamed the state’s budget woes on factors beyond his control. “The oil price drop has been good for consumers, but it’s had a big impact on our revenue,” Jindal told me.
But that’s not how Republican elected officials and independent budget experts see it. They say that the plunge in oil prices and the subsequent loss of revenue for the state treasury has exacerbated—but did not create—the budget issues. The real cause, according to these sources: Jindal’s aversion to tackling politically tough issues and his tendency to resort to ploys to paper over the problems. And then, of course, there is The Pledge.
In 2003, as a private citizen running for governor (he narrowly lost), Jindal promised to “oppose and veto all efforts to increase taxes.” This was part of the bargain he agreed to when he took the pledge—the shorthand description of the Tax Protection Pledge hawked by Americans for Tax Reform, the group headed by antitax zealot Grover Norquist. As governor, he has taken the “no tax” commitment to such lengths that in 2011 he vetoed legislation supported by dozens of Republicans that sought renewal of a 4-cent portion of the state’s 36-cent-per-pack cigarette tax, the country’s third lowest. “His only reason is that he’d taken the crazy position that if you renew a tax or suspend an exemption it was a tax increase,” said state Rep. Harold Ritchie, a Democrat and smoker who sponsored the measure. Lawmakers found a way to approve it without Jindal being able to exercise a veto.
In 2013, Jindal promised to whack a measure that would have raised $1 million for the hearing impaired through a fee on monthly cellphone bills. The amount: 2 cents per month. “I was totally shocked,” said state Rep. Patrick Williams, a Democrat who sponsored the measure.
Jindal boasts about his no-tax stance to Republican audiences throughout the country. “I’ve been very honest and clear with voters,” Jindal said in the interview. “I would not raise taxes. We need to shrink the size of government. We’ve done that.” That is true. Louisiana has 33,000 fewer state workers than when he took office, in large part because he got the legislature to privatize the public hospitals.
Jindal has plenty of defenders in Louisiana. “The majority of voters think they pay enough taxes,” said state Rep. Lenar Whitney, a Republican from south Louisiana who is also the party’s national committeewoman. “I’d rather cut the size of government than raise taxes.” The conservative Tax Foundation ranked Louisiana as having the 46th lowest tax burden as a share of state income. Louisiana also scores at the bottom in education and health care.
The pledge wasn’t an issue when Jindal became governor in 2008 and the state had a healthy budget surplus thanks to the taxes produced by massive federal government and private insurance spending following Hurricane Katrina and Hurricane Rita. The state legislature cut income taxes for higher-end earners by a total of about $700 million per year. Jindal was not an initial supporter, perhaps because of warnings that the surplus would not last as the outside spending tapered off. He went along with the plan, though, and now takes credit for it.
When the national recession hit, Louisiana lost about $1 billion in revenue as consumers and companies spent less. That forced Jindal and the state legislature to take a sharp knife to a state budget in which much funding—such as for K-12 schools and additional pay for firefighters and police—is protected constitutionally and thus invulnerable to drastic cuts. Refusing to raise revenues to cover the shortfall, Jindal instead turned his sights on cutting health care for the poor and slicing funding for the state’s public colleges and universities.
It was not enough. He then shaved another $341 million in the middle of the 2009 budget cycle to avoid ending the year with a deficit. Jindal—buoyed by the tax cuts, his anti-government rhetoric, a growing state economy and his opposition to abortion —won reelection in 2011 with 65 percent of the vote.
Those heady days are long gone. In December, Jindal had a 41 percent approval rating, according to SMOR Louisiana Report, an independent state poll. Analysts say voters think he has cut too much and been inattentive to the state’s needs while pursuing his national political ambitions. On a per-student basis, Jindal’s cuts to the public colleges and universities have been the deepest of any state over the past eight years, according to the Center on Budget & Policy Priorities. Raising tuition—which does not count as a tax increase, although the effect is the same—has filled most of the gap. Tuition at the public institutions will be 90 percent higher in 2015 than when Jindal took office.
In 2013, Jindal sought to eliminate state income taxes, as several other Republican governors were proposing at the time. He abandoned the plan on the opening day of the legislative session. Legislators rebelled because he would have offset the lost income tax revenue by raising business taxes and giving Louisiana the country’s highest sales tax rate. This move technically would not have violated the no-tax pledge because it would simply have replaced, rather than raised, tax revenue. But it wouldn’t have helped the fiscal situation, either, for precisely the same reason.
Reluctant to pay the political price to cut more and sticking by the pledge has put Jindal in a fiscal box. His solution: Rely increasingly on what Richardson, the LSU economist, calls “all sorts of gimmicks”—balancing the budget through one-time sales of state property, legal settlements with companies sued by the state, the elimination of vacant state jobs and a tax amnesty program. “Doing it for one year is not bad policy,” said Richardson. “But doing it for four or five years is not sustainable.”
Steve Winham, who served as the state’s budget director for Democratic and Republican governors, knocks Jindal for another patchwork scheme: taking money from state agencies or programs to plug the overall hole and, in the process, creating new and often more expensive problems. For example, the Jindal administration has taken about $7 million per year away from the state park maintenance fund. The result: a $21 million backlog in repair work for state parks. Winham also points to techniques he describes as shell games: A $25 payment to get an Animal Friendly license plate, for example, hasn't gone to spay cats and dogs—as many people believe —but instead has provided a total of $30,000 for the budget. And then there are budget schemes that have yet to materialize. For the past two years, the Jindal administration said the state would collect about $15 million by selling the campus of Southeast Louisiana Hospital. The sale has yet to happen.
These tactics have failed to close the budget shortfall. Louisiana finished 2014 with an operating deficit of $167 million, said Richardson. “We just kind of muddle through every year,” Winham said. “But we’re finally hitting the wall. It’s sad.”
Jindal bragged in a 2008 Wall Street Journal op-ed that he had ended the practice of using one-time money to fill budget gaps, but he now says the state legislature’s budgeting practices have forced him to resort to the device. This year’s budget has $1.1 billion in money that won’t be available next year—four times as much as the 2013 budget. His increasing use of one-time funds has given rise to a group of dissatisfied Republican state House members known as the Fiscal Hawks. Their leader is state Rep. Brett Geymann, a conservative Republican and oil pipe salesman from the city of Lake Charles. Geymann and other Fiscal Hawks have sought meetings with Jindal to discuss their concerns, to no avail. “He’s a conservative in that he doesn’t want to raise taxes and wants a business-friendly environment,” Geymann said. “But this administration—with a Republican legislature—has continued to spend more than it has taken in. That in my view is not fiscally conservative.”
Like Winham, Geymann believes another reason Jindal has exhausted the easy options is because he has drawn down the various state reserve funds. When Jindal took office, the Medicaid Trust Fund for the Elderly had $800 million. That money is now gone. The Office of Group Benefits—the health insurance program for current and retired state employees—had $500 million in 2011. Then the Jindal administration lowered the premiums that both the beneficiaries and the state had to pay to the fund, which helped fill the state’s budget hole but helped drop the fund’s bottom line to $120 million. The state rainy day fund had $730 million when Jindal took office. Today? $460 million. At one point, Jindal had a $450 million fund to subsidize companies for investing in Louisiana. That money is—you guessed it—gone. “He’s drained every savings account we have,” said Kennedy, the state treasurer.
The result is a budget crisis, according to Lt. Gov. Jay Dardenne, a Republican who is running for governor this year. “It’s as bad as I’ve seen it over my career,” he said. “If I’m governor, I’ll have my sleeves rolled up every day dealing with the problem. It’s staggering the number of days he’s gone. I don’t know what he’s doing. It does not appear that the budget problems are on his radar screen.”
Republican U.S. Sen. David Vitter, the early front-runner in the governor’s race, has said that, if elected, he would call a special session as soon as he took office next year “to stabilize the state budget and promote greater job growth.” Jindal believes that his successor will be building on his successes, which include improved bond ratings and billions of dollars in new investment in the petrochemical industry. Independent analysts attribute much of the new investment to low natural gas prices that were outside Jindal’s control. The governor insists, however, that reducing taxes and shrinking the size of government has been the key. “We’re a top five state for private-sector growth,” he told me.
Economic growth in Louisiana has slowed since 2010, however, and Louisiana was one of only two states where the unemployment rate rose in 2014. Jindal attributes that to population growth and more people looking for work. Louisiana’s labor force grew at the fastest rate of any state last year, according to the Bureau of Labor Statistics. But Louisiana’s economy is worsening now with the oil price drop. Sasol, a South African conglomerate, announced last week it would delay a $14 billion natural gas project in Lake Charles that Jindal had repeatedly touted as a sign of the state’s economic boom. In the meantime, no one can deny that the cuts to the state’s colleges and universities will hurt job creation.
Political insiders believe that Jindal thought he could skirt the budget problems during his final year while he decamped to Iowa, New Hampshire and South Carolina —critical early states in the 2016 presidential race. That no longer seems possible. The fate of a modest program that Jindal championed last year illustrates why. The initiative provided $40 million for the state’s colleges and universities to craft programs to educate students for high-demand jobs. The Associated Press reported last week that the initiative was facing the ax. The Baton Rouge Advocate promptly editorialized that the decision was “typical of the chronic mismanagement of the state budget under” Jindal.
Jindal’s administration just as promptly backtracked and is now proposing to save the program. How? By taking $30 million from a federal hurricane recovery fund.
Tyler Bridges, a freelance writer based in New Orleans, is a former Nieman Fellow and reporter for The Miami Herald and The TimesPicayune. He is the author of The Rise of David Duke and Bad Bet on the Bayou: The Rise of Gambling in Louisiana and the Fall of Governor Edwin Edwards.Politico Magazine