Jindal cuts La. budget 25% and sky doesn't fall

Jim Geraghty

is a contributing editor at National Review, who frequently appears on CNN, Fox News Channel, and MSNBC

One gubernatorial election ended early this fall, when Louisiana Gov. Bobby Jindal won the state's blanket primary Oct. 22. Under Louisiana's system, all candidates of all parties are listed on the ballot, and if no one gets 50 percent, the top two finishers go to a runoff. Jindal blew past the threshold with 66 percent.

Jindal's reelection was unusual in several respects. The only previous time the state has not had a runoff was his election in 2007. He is only the fourth Republican governor in the last 125 years in Louisiana, and one of those four switched over from the Democrats in office. Jindal's best-known challenger this year was a schoolteacher, who raised less than 1 percent of the incumbent's campaign treasury. The Democratic State Central Committee declined to endorse any candidate running on its party label.

But perhaps most unbelievable is that Jindal faced no serious competition after cutting state spending more than 25 percent. In January 2008, the state had a budget of $34.3 billion. This summer, Jindal signed into law a budget spending $25 billion. As governors from Harrisburg to Trenton to Columbus to Madison have learned, cutting a state's budget is difficult enough; doing so without a significant backlash seems a politically impossible task.

A key part of Jindal's story is recognizing that he took the helm of a state that had hit bottom: Decades of mismanagement and corruption had taken their toll even before Hurricane Katrina wreaked such devastation and exposed such colossal unresponsiveness in state government. The state, recognizing the bitter fruit of its traditions of colorful corruption, was ready to take a chance on a then-37-year-old Indian American congressman who speaks roughly 100 words per minute. The state was willing to try a new approach to governing; how much worse could it be?

Privatization played a big role in Jindal's reinvention of state government, with private contractors taking over state-run operations for a lesser cost. The companies often hired the state workers who would often be the centerpiece of opponents' criticism.

His administration privatized the state's Office of Risk Management. Then the state's Division of Administration privatized claims management and loss prevention in the self-insurance program, saving $20 million over five years. The Department of Health and Hospitals privatized six inpatient, residential-treatment programs around the state, saving $2.5 million. Separately, patients were moved from state-operated institutions that cost $600 or more per patient per day to community-based services and private group homes that average $191 per day, saving an additional $23.8 million.

Consolidation was another key element: The state's Department of Revenue shrank from eight offices statewide to three. The Department of Children and Family Services consolidated its offices from 157 to 90, saving a total of $2.7 million.

But some of Jindal's cuts are the old-fashioned kind. The state sold 1,300 vehicles from its fleet of automobiles. Louisiana's Transportation Department shut down a ferry that was used by only 7,200 drivers per year, saving the state roughly three-quarters of a million dollars.

In fiscal 2011, Louisiana eliminated more than 3,500 full-time government positions. Add the 6,363 previous reductions during Jindal's term, and that means a total of almost 9,900 full-time positions reduced since he took the oath, a savings of almost $600 million. Louisiana now has the lowest level of full-time state government employees in almost 20 years.

"You change people's expectations and you make structural changes," Jindal said, while racing around the state about three weeks before the election. "The most important is this cultural change, to say government is not the answer to everything. In a weird way, I want the office of governor to be less important than it is. What I mean by that is, there was an old joke that kids in Louisiana don't grow up wanting to be president; they grow up wanting to be governor. You should want them to want to business leaders or doctors or teachers."

Some cuts were more noticeable to the public, but Louisianans found shorter hours and workweeks at state facilities more palatable than complete shutdowns or higher taxes: Historic sites are now open five days a week instead of seven, pools at a half dozen state parks were closed on Mondays and Tuesdays this summer, and entrance stations at all state parks had shorter hours. Finally, 54,000 rank-and-file state workers are going without a raise for the second consecutive year.

Jindal's first term was marked by several high-profile crises he successfully managed - Hurricane Gustav and the response to the BP oil spill, along with the Obama administration's six-month moratorium on all drilling in the Gulf of Mexico - but the state's economy has generally chugged along: Louisiana's unemployment rate is 7.1 percent, two percentage points lower than the national average, and a comparably booming economy makes cuts in state spending much easier to take.

"If you have a good-paying job with benefits, you wouldn't need the state to do so many things for you," Jindal says. "You become less dependent, and that diminishes the role of the state and so you need fewer state employees, and it's a virtuous cycle. You can lower taxes and lower government spending."

The governor hasn't achieved everything he has wanted. He proposed having state workers direct an extra 3 percent of their pay toward retirement, but the state House speaker, Republican Jim Tucker, decided that it constituted a tax increase and would need a two-thirds vote to clear the House. The state legislature also declined to vote on Jindal's proposal to merge two financially struggling institutions of higher education, the University of New Orleans and Southern University at New Orleans.

Does Jindal's success suggest that governors can cut the budget without dramatic political backlash elsewhere? Skeptics can argue that post-Katrina Louisiana represents a unique case of a state's electorate abandoning all aspects of a failed status quo. But what today's Louisiana demonstrates is that after the reforms were enacted, the sky didn't fall. The government spent less, and for the vast majority of state voters, life goes on. Few noticed a decrease in quality of service, or in the examples of the limited hours for museums, etc., that were difficult to turn into crusades. ("Give me state museums open six days a week, or give me death!") Poll numbers suggest we may be already seeing similar phenomena in response to once intensely controversial cuts in places like New Jersey, New York, and Wisconsin.

Smaller, more efficient state governments may not be such an impossible dream after all.

at jiminturkey@gmail.com.