Archive for June 1, 2009

Report: 'Governor agrees to House, Senate plans to restore college funds'

Governor Bobby Jindal said in a briefing today that he agrees with a legislative plan to mitigate budget cuts for higher education.

Gov. Bobby Jindal says he supports a House plan to restore $100 million of the $219 million cuts currently proposed in the budget for next fiscal year.

In a press conference this morning, the governor said he also agree with a Senate proposal to utilize $50 million in “Rainy Day Fund” money to assure that half of the funds are available as soon as the budget goes into effect July 1.

Senators said the $50 million in expected tax amnesty funds included in the House plan might not be available in time to avert layoffs and other budget-balancing actions, so $50 million in Rainy Day money should be utilized until the amnesty money comes into the state treasury.

“We would support that if the Senate decides to do it,” Jindal said. “I’ve said I’m open to ideas of using rainy day funds, as long as they meet our criterion.” Which include not utilizing a major portion of the fund because future budget years are expected to be worse.

Jindal said he also supports the other parts of the House plan, transferring $13.5 million from the Rapid Response Fund for economic development, $10 million from the Insure Louisiana Fund to help the agriculture schools at LSU and Southern and $30 million that’s expected from tuition hikes expected t be implemented next spring.

The governor said he agrees with the call for higher education and other parts of state government to “do more with less.”

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Report: 'Oil price drop makes for some losers as well as winners'

Lower oil prices are making drives happy at the pump, but McClatchy Newspapers reports that good news for some is troubling for others, including the State of Louisiana.

Lower oil prices mean declining revenue for oil companies and oil revenue-dependent governments, and they’ve suffered as oil prices have dropped by 75 percent since July.

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The oil-price drop continued Friday, with prices falling below $36 a barrel — their lowest in more than four years — from their high of $147 in July. Prices fell even as the Organization of Petroleum Exporting Countries pledged this week to cut oil production by a record 2.46 million barrels a day to stop the decline.

“Realistically, we won’t get back to the $80-a-barrel range until 2010,” Johnston said. “With unemployment rising, people are making fewer trips to work, and demand is down.”

Overall, the United States — the world’s biggest net oil importer — comes out ahead with the fall in oil prices. The drop comes at an opportune time for millions of households in areas that rack up high heating bills.

[...]

“Governments are going to be severely tested in trying to address all these factors,” Sherr said. “There’s going to be a lot of pressure on commodity-exporting countries and on their currencies and reserves.”

U.S. states that depend on oil revenue, such as Louisiana and Texas, also are suffering, as are drilling, trucking and oil exploration firms, which had seen business boom when prices were high.

Foreign and domestic oil companies are abandoning exploration projects that had been profitable at $140 a barrel but aren’t worth continuing at $35 a barrel.

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