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Spin Check: State of the State and Democratic Response

With three whacks of the gavel, Speaker Chuck Kleckley called the Louisiana House to order, starting the 2015 legislative session. The main event of day one was Governor Bobby Jindal’s address.

“Here we are—the moment so many of us have been waiting for: my last state-of-the-state speech,” Jindal began, to appreciative laughter from senators and representatives alike.

Joking aside, the governor made several claims regarding the state of Louisiana’s economy. Democrats, led by Amite Rep. John Bel Edwards, challenged several of those statements. Let’s check both for spin.

Jindal said, “We have balanced our budget every year.”

TRUE. The state constitution requires a balanced budget. How it has been balanced—plugging holes with one-time money—contributed over $1-billion to the $1.6 billion shortfall lawmakers are grappling with this session.

Jindal said, “We cut taxes.”

TRUE, as far as the statement goes. Income tax rates were cut in 2008, over Governor Jindal’s initial objections.

Democratic Caucus responds to State-of-the-State address

John Bel Edwards, for the Democratic caucus, said, “The governor has created a structural deficit here in Louisiana.”

FALSE. The legislature pushed the 2008 rollback of income tax rates which were part of the voter-approved Stelly Plan. The higher rates under Stelly were designed to prevent structural deficits in the state budget.

Jindal said, “We have received eight credit upgrades.”

TRUE, although it leaves out the latest cautions by two of the top three credit rating services: Moody’s and Standard & Poors.

The Democrats’ response was, “Our bond rating most recently has been moved to negative.”

FALSE. Louisiana’s credit rating has not been downgraded—yet. The aforementioned cautions by Moody’s and Standard & Poors have changed Louisiana’s credit outlook to negative.

Jindal said, “The budget challenge we face this year is a result of falling oil prices.”

Partly TRUE. The plunge in the price of oil reducing state revenues by $400-million.

Edwards, for the Democrats, said, “The projected deficit was $1.2-billion before the price of oil dropped a penny below the forecast amount.”

TRUE.

The governor said, “We have more people working in Louisiana than at any other time in the state’s history.”

TRUE, in December 2014. According to the Bureau of Labor Statistics, 20-thousand fewer Louisiana residents were working in February than in December— for a lower job total than in May of 2014.

Democrats said, “Right now, the state of Louisiana has the nation’s third highest unemployment.”

TRUE. Only Nevada and Mississippi have higher unemployment rates.

Governor Jindal also said, “I measure Louisiana’s prosperity not by the prosperity of our government, but rather by the prosperity of our people.”

Unfortunately, neither of those standards of measurement indicate success. Louisiana has a $1.6-billion revenue shortfall, and the U.S. Census says median household income in the state has declined 6.7 percent since Jindal took office in 2008.