Here in New Orleans in preparation for the Rotary International 2011 convention, I found that after recovering from the Katrina disaster which ravaged New Orleans and the state of Louisiana, the citizens are now faced with another storm. Of course, it is not alone, for other parts of the United States have been devastated by the economic and financial turmoil that began in Wall Street and spread to the American Main Street. The recovery has been slow and one sees this effect in the plunging popularity of US President Barack Obama.

Besides the recession, much of the post-Katrina recovery spending is winding down and a number of tax cuts are taking effect. While the level of layoffs in the private sector has slowed, new jobs are not adding up rapidly. Households are therefore worried and changing their buying behaviour affecting sales patterns and the state revenues.

These have meant that the state is under the severe pressure of a budget shortfall. Economists monitoring the state’s revenue streams have noted that sales and income taxes in January and February were well below the rates previously anticipated. It is reported that the trend could lead to a $250 million to $400 million decrease in the state budget for the current fiscal year.

Gov. Bobby Jindal is putting together a contingency plan for budget cuts and keeping the door open to the possibility of tapping the state’s rainy day fund. The fund, which is fed by various excess amounts of revenue that at times become available, was intended as a way to taper the state operating budget when windfalls of money could inflate spending.

Gov. Jindal is backing the decision of the Louisiana State University to close its Baton Rouge hospital and shift its medical education and inpatient hospital care in the capital city to Our Lady of the Lake Regional Medical Center.  This move will keep the state from having to build a $480-million replacement hospital for the out-dated, state-owned Earl K. Long Medical Center, which serves the poor and uninsured. The state Civil Service Commission has voted to suspend the 4 percent annual merit pay raises for about 60,000 state workers under its jurisdiction for the first time in 20 years.

Gov. Jindal followed with an executive order placing an immediate freeze on merit pay for about 30,000 unclassified workers, such as state department heads and hundreds of political appointees.  All these are in addition to previous actions – three hiring freezes and elimination of more than 3,000 government positions.

The Philippine government should seriously consider learning from the experience of the State of Louisiana in the light of its deteriorating fiscal position, which will be exacerbated in the future with the generous fiscal incentives and exemptions signed into law recently.  It should have the political will to trim down the bureaucracy, cut budgets, freeze wage increases even with an election looming. Anyway, president GMA is not running for a national office.  Or is the Speaker of the House a national office?

Business Bits.  The UP Vanguard Inc. should be commended for a very successful National Homecoming last weekend.  The strengthening of bonds should lead to the mobilization of the fraternity brothers in ensuring that the May elections will lead to meaningful change and a better life for the poor and marginalized.