Moody’s: Louisiana has a “structural deficit”
The rating agency Moody’s confirmed on Monday what almost everyone in Louisiana already knows: State government has a “structural deficit,” where the money that’s collected each year in taxes doesn’t meet the needs in education, health care and infrastructure, even when the economy is recovering. The agency issued a “credit negative” report on Louisiana, the Associated Press reports:
Treasurer John Kennedy called the write-up a sign that the rating agency is closely following state budget troubles to determine if its credit rating should be lowered. “I read this as a warning shot,” Kennedy said. Moody’s said the issuance of its report doesn’t suggest the state is in imminent threat of a credit rating downgrade, which would drive up the costs of state borrowing for construction projects and highway work.
And while the Jindal administration continues to blame the recent fall in oil prices for the state’s fiscal woes, Moody’s makes clear that’s far from the whole story.
Most of the shortfall is tied to the use of more than $1 billion in patchwork funds that were used to pay for ongoing services this year, but that are slated to disappear next year. The problem has been deepened by the oil price drop, which was the driver of Moody’s two-page update on the state’s financial problems.The rating agency said balancing next year’s budget will be “especially challenging” because of a dwindling set of reserve funds.
One-third of voucher students in “failing” schools
About 7,300 students receive vouchers to attend private schools across Louisiana as part of a program that was at the center of Gov. Bobby Jindal’s 2012 education reform package. The $42 million program’s goal is to help lower-income students in schools rated C, D, or F attend private schools that are presumably of higher quality. But as Nola.com reports, that isn’t necessarily happening:
One third of Louisiana’s voucher students are enrolled at private schools doing such a poor job of educating them that the schools have been barred from taking new voucher students, according to Education Department data. To ensure the money is well spent, voucher students take the same state tests as their public school peers. If they don’t meet academic targets, their schools may not enroll new voucher students, although the children already there may stay. This year, 131 private schools are participating.
One principal told the Times-Picayune that the data isn’t a sign that the private schools are performing poorly, but speaks to how far behind the voucher students are. This may be true, but there is no way to know. While voucher students are required to take accountability tests, other students at voucher schools are not, giving no chance for parents to make meaningful comparisons between schools or for policy makers to track progress. LBP recommended stronger accountability and transparency measures back in 2012 that would have solved this current problem .
Federal budget could threaten offshore revenue sharing
Under a 2006 law, Louisiana and other gulf states are set to receive a share of federal revenues from offshore drilling starting in 2018. In Louisiana, the money is already earmarked for coastal restoration projects. But on Monday, when President Obama released his draft of the federal budget, those revenues weren’t there. The Advocate reports:
The Democratic president’s $4 trillion blueprint for the 2016 fiscal year starting Oct. 1 would eliminate the sharing of revenue from drilling in federal waters with Louisiana and three other states along the Gulf of Mexico…The president’s budget proposal has “a zero percent chance of becoming law,” U.S. Sen. David Vitter, R-La., said in a prepared statement…
Where are advanced industry jobs?
A new report from the Brookings Institution ranks the nation’s 100 largest metro areas by their number of “advanced industry jobs,” some of the highest paying jobs in the economy. Baton Rouge and New Orleans rank near the middle, the Advocate reports.
Brookings identified 50 research-and-development and other manufacturing and service industries that need workers with skills in science, technology, engineering or math. They range from aerospace and automotive to chemicals and clay products and petroleum and pharmaceuticals.
Among the nation’s 100 largest metropolitan areas, Baton Rouge’s ranked 62nd for its 31,820 jobs in advanced industries. Brookings said those area workers averaged annual pay of $85,370 in 2013, while workers in all other area industries averaged $47,630. With 41,840 advanced industry jobs, the New Orleans area ranked 51st in the nation in 2013. Those workers averaged $90,110 in annual pay. Workers across all other industries averaged $49,470.
Number of the Day
2,550 – Number of voucher students in “failing” schools that are barred from accepting more voucher students due to poor performance (Source: Nola.com)