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| B | Louisiana |
• Population (rank): 4,287,768 (25)
• Average per capita income (rank): $20,367 (47)
• Total state spending (rank): $24,220,667,000 (21)
• Spending per capita (rank): $5,649 (17)
• Governor: Bobby Jindal (R)
• First elected: 10/2007
• Senate: 39 members: 23 D, 16 R
• Term limits: 12 years (consecutive)
• House: 105 members: 53 D, 50 R, 2 I
• Term limits: 12 years (consecutive)
Rarely has there been a better test of a state's management systems than Hurricane Katrina. It challenged Louisiana's capacity in personnel, infrastructure, finance and information, all at once. And while the New Orleans area is still deeply troubled by the effects of Katrina's wrath — and individual leaders have faced constant criticism over some of their crisis decisions — the state's management structures weathered the storm surprisingly well.
Even in the immediate post-Katrina chaos, employees got paid — on time. Agency managers were allowed to compensate workers for extraordinary duty. And ultimately, when it became necessary for budget reasons, existing rules allowed for layoffs of about 3,000 employees. "We had a lot of flexibility in the system to manage as needed," says Jean Jones, deputy director of the Department of State Civil Service.
Post-Katrina Louisiana needs lots of skilled engineers and managers, and recruiting isn't easy when state salaries are below those in the private sector. So the Department of Civil Service has responded with higher starting pay rates, housing and referral stipends for New Orleans-based positions, and direct-hiring authority that allows individual agencies to fill crucial positions quickly. An online-application system, soon to be launched, should help bring the state closer to competitiveness with private industry.
Budgeting, of course, has been an unusual challenge in the post-storm environment. Louisiana has a deservedly praised performance-based budgeting process, and respectable systems for purchasing, contracting and financial reporting. But those business-as-usual strengths didn't help very much when nobody could guess how much money would need to be spent altogether. "It affected half our state," says State Economist Deborah Vivien. "We were making an estimation based on historical situations when there was no historical precedence."
In the end, Louisiana slashed its binding revenue projection for 2006 by $1 billion, a tough hit to take for agencies already battered by the storm. It turned out the $1 billion figure was wildly pessimistic. Within weeks, millions were flowing into the state from the federal government, insurance claims and companies starting to rebuild. Louisiana ended 2006 with an $800 million surplus. That grew to $1 billion in 2007, thanks to higher-than-projected income and sales tax revenues and the booming oil and gas industry.
Although the state wisely directed a portion of that money toward needed one-time expenses, some fear that too much of the surplus went to tax cuts that will be hard to repeal in future situations of scarcity. Says State Treasurer John Neely Kennedy, "Reconstruction will end at some point."
The state's most visible management weakness — now, as in the past — relates to infrastructure. There is a deferred-maintenance backlog for buildings and roads in excess of $5 billion. As for new building, although the Office of Facility Planning and Control made some improvements in the past two years, allocating estimated funds across 10 categories and slating requested projects into them, that hasn't fixed the most significant capital-planning problem: the legislature's proclivity for approving a laundry list of projects many times longer than the state could ever fund or accomplish. The real prioritization comes after that, when the governor, according to his or her own priorities, recommends a subset of those projects to be funded by the Bond Commission.
A state with such pressing capital needs deserves a less political planning process, starting with a legislature that stops promising projects that will never make it to the drafting table and leadership that arrives at priorities in the light of day. A new legislature, with an unusual number of newcomers brought in by term limits, will have the chance to make dramatic progress here simply by allowing reality into the process. That's not too much to ask for.
For additional data and analysis, go to pewcenteronthestates.org/gpp.