It is budget crunch time in Louisiana. Due to falling oil and gas prices and declining federal revenue, Louisiana is now facing a huge budget shortfall.

Demand for oil is declining as a worldwide recession gains steam. For Louisiana, this is a problem because the higher the price of oil, the more money that flows into state coffers. State government collects severance taxes on oil and gas production throughout Louisiana and receives royalties from oil and gas drilling on state property.

A few months ago, oil was near $150 per barrel and the state of Louisiana was awash in cash. Today, oil is at $50 per barrel and dropping, while the state of Louisiana is basing the budget on an oil price of $84 per barrel. This situation has led to a projected $1.3 billion budget deficit in Louisiana. How should we deal with this crisis? In the past, Louisiana would raise taxes to cover a hole in the budget. Clearly, with a financial crisis and an economic recession, it is not time to raise taxes. It is the perfect time to make some needed cuts in the budget.

According to State Rep. John Schroder (R-Covington), “Clearly, our government’s too big.” Schroder believes that state government spending can be trimmed. “I want to see bricks and mortar and people cut,” he said.

In fact, cutting the state budget should be easy. Over the past 12 years, the Louisiana state budget has tripled, growing from approximately $10 billion to $30 billion. In the current state budget, it should be simple to find waste and unnecessary spending. There are plenty of ways to balance this budget and the first priority should be budget cuts.

Unfortunately for some state leaders, cutting government is their last option. There are rumors that the Jindal administration will forestall cuts in the budget by raiding $285 million from the Rainy Day fund to help cover the deficit.

The Rainy Day fund needs to be preserved for an emergency. This budget deficit is not an emergency, but an opportunity to bring our budget in line with other states. No state in the country has matched the type of state government growth that Louisiana has experienced in the past 12 years.

It is ironic that while our budget was expanding, our state population was contracting. A new U.S. Census Bureau survey indicates that since 2000 Louisiana has lost more people per capita than any other state in the nation. In seven years, the population of Louisiana has declined from 4.5 million to 4.29 million people. So, in Louisiana, our public sector has been growing to service a shrinking population and a diminishing private sector. This is the exact opposite of the preferred situation of a growing private sector and a dwindling state bureaucracy.

In Louisiana, it is unfortunate that some of the highest paying jobs are in state government. These prestigious positions should be awarded to people who want to serve the public, not to those who demand exorbitant salaries. In Louisiana, we are paying some state department executives $500,000 annually in salary and benefits. These compensation packages are outrageous and should have been approved only in cases of superior performance. Excellence should be handsomely rewarded, but in Louisiana state government, bureaucrats are able to cash in before reaching their first goal. Again, we do things the wrong way in Louisiana.

The Rainy Day fund should be conserved, not raided to cover a budget deficit in a state government which has tripled in size in just a few years. We should save this fund for a real rainy day, which Louisiana will certainly be facing in the not too distant future.

Jeff Crouere, a native of New Orleans and resident of Mandeville, is host of a Louisiana-based program, “Ringside Politics,” which airs at 7:30 p.m. Fridays and 10 p.m. Sundays on WLAE-TV 32, a PBS station, and 7-11 a.m. weekdays on WGSO 990 AM on the Northshore. For more information, visit his Web site at www.ringsidepolitics.com. E-mail him at jeff@ringsidepolitics.com.