Oklahoma and Louisiana Very Much Alike in Dealing with Oil and Gas Downturn Impact

While Oklahoma government leaders grapple with a budget hole of an estimated $1.1 billion, the state of Louisiana has an even bigger budget hole of $1.9 billion. Both states are suffering because of the massive downturn in the oil and gas industry. Both are figuring ways to cut budgets without cutting certain state survices.

In Louisiana, Governor John Bel Edwards, a Democrat, is considering a penny increase in the state’s 4-cent salex tax. There is consideration of a 22-cent a pack tax hike on cigarettes, adding to the 86-cent tax rate approved last year by the Louisiana legislature. It’s a move that could bring in millions to bring some relief.

State leaders in Louisiana are facing a $750 million shortfall in the current fiscal year but it’s expected to grow to $1.9 billion in the budget that starts July 1.

“This is not the budget plan I wanted to bring in my second week in office,” said Gov. Edwards in recent days, “but these problems are bigger than our state has ever seen.”

Raising taxes is something he did not openly push during his heated campaign last fall when he defeated Republican U.S. Sen. David Vitter.

The massive budget hole has the attention of higher education leaders because one recent report suggested that if the legislature refuses to go along with Gov. Edwards’ proposals, Louisiana State University would have to cut a projected $65 million from its budget. Leaders say that would mean faculty layoffs, fewer classes, cuts to support services and other reductions.

“The scenario also would similarly play out on camupses across the state in every system if the state Legislature doesn’t find additional revenue to avoid cuts,” stated a 19-page report by LSU leaders. “Without that cash infusion, higher education institutions will face a $131 million hit—about half of that at LSU alone.”

Just last week, the University of Oklahoma Board of Regents went along with a plan from OU President David Boren to cut $20 million in spending at the school. But it included no layoffs.


%d bloggers like this: