While we’re seeing some of the lowest fuel prices in years at the gas pump, in Louisiana, that savings will wind up costing us elsewhere.
Because no one knows what’s going to happen with oil prices and when, we’ve already started seeing some belt-tightening in the oil and gas industry, which spills over into many other businesses in the state.
In northeastern Louisiana, we are not as severely affected by a downturn in the oil or petrochemical industry as areas to the south. But where we will see a serious impact is in the belt-tightening that is inevitable at the state government level.
That is caused to a degree by the forecast revenue from oil severance taxes. But state revenue also will be impacted by loss of sales and income taxes as this industry and others that rely on it contract in reaction to the downturn in pricing.
Already we have seen the forecast of $300 million in cuts to higher education in the new fiscal year that begins July 1. We don’t know how that will eventually play out for the University of Louisiana at Monroe, Louisiana Tech University, Grambling State University and Louisiana Delta Community College. You can bet it means something, though.
What we do know is that GSU is already on the financial edge without any cuts, and the others have managed through draconian losses of state funding in recent years.
Each time our universities are cut, it has an economic impact locally in our communities. Don’t kid yourself about that, even if there are no associated layoffs. When vacant jobs go unfilled, when contracts for local services aren’t issued, when supplies aren’t purchased, when repairs aren’t made – this has an impact on our local economy.
Add to that the already announced cuts to the Secretary of State’s office, and we find that one of our most popular local attractions, the Chennault Museum, will be affected, and you can begin to understand the picture.
As of this writing, we don’t know what impact might be ahead for health care, another “unprotected” area of the state’s budget.
Our legislative delegation has an extremely tough job ahead trying to preserve what is essential for northeastern Louisiana.
Enjoy those low prices at the gas pump while they last. It’s worth cheering about when it costs you half what it used to on a fill-up, but the jobs lost and families affected directly and indirectly by our reliance on this industry are no cheering matter.
The editorials in this column represent the opinions of The News-Star’s editorial board, composed of General Manager and Executive Editor Kathy Spurlock, Business and Politics Reporter Greg Hilburn and Education Reporter Barbara Leader.
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