A new red state slush fund?
The Gulf Coast states — Florida, Alabama, Mississippi, Louisiana, and Texas — are all governed by Republican governors and have Republican majorities in both legislative chambers. With the exception of purplish Florida, these are rock-ribbed conservative states. Yet they may be on the verge of significantly growing their state budgets and public sector payrolls.
That’s because each state is looking at a one-time windfall totaling between the hundreds of millions and several billions of dollars in fines from BP and Transocean paid pursuant to the 2010 Deepwater Horizon oil spill. Under the terms of the RESTORE Act, which Congress passed in 2012 with strong bipartisan support, 80 percent of Clean Water Act fines will go into a trust fund for economic and environmental projects along the Gulf Coast. States directly control 65 percent of that fund and indirectly control most of the remainder.
Conservatives helped lead the charge for the RESTORE Act (the House version was sponsored by now-Republican Study Committee Chairman Steve Scalise, R-La.), and it embodies a number of conservative principles including devolution of authority from Washington and an emphasis on economic growth. Perhaps most notably, it didn’t create any new bureaucracies or permanent programs reliant on taxpayer funds.
But just because the legislation represented conservative fiscal policy doesn’t mean the states will execute it that way.
The simple fact is, states don’t have a great track record with windfall money, which, even when tied to specific spending, has a knack for making its way into general revenues. Revenue volatility tends to exacerbate poor decision-making. And”“temporary” spending tends not to be so temporary.
The RESTORE Act funds are just such a one-time windfall, and it’s entirely possible that funded projects could (if incorrectly designed) create ongoing liabilities for taxpayers. In other words, conservatives could inadvertently use this windfall to permanently grow the governments of the Gulf Coast states. As the massive growth of government under the Bush administration showed, conservatives that think it will help them win elections aren’t shy about busting budgets just as much as those on the political left.
Given the near-religious fervor with which many progressives want to raise taxes (especially on higher incomes), it would seem odd if this were not a deliberate strategy on their end. The urge to add new public sector jobs — and (ostensibly) private sector “green jobs” that rely on public subsidies — will be strong, and something conservatives may be willing to give up in political horse trading.
They shouldn’t. Nor should they use the RESTORE Act funds as an excuse to put off politically painful, but necessary, reforms. That way lies failure.
There are certainly things for which the RESTORE Act provides that conservatives can and should support. Louisiana is facing a crisis as its wetlands disappear; this puts citizens, homes, and businesses across the state progressively closer to the ocean. Louisiana’s Coastal Master Plan provides a good template for decision making in the state about RESTORE Act money, and the media and watchdogs should question every RESTORE Act dollar spent outside the Master Plan.
The economy and the ecology of the Gulf Coast are closely linked, so good environmental programs (including flood infrastructure) can have significant economic benefits. Gulf Coast tourism supports over half a million jobs and generates over $45 billion in annual consumer spending. Restored shrimp, oyster, and fish habitats are critical to the commercial and recreational fishing industries. Since the coast’s ecology has been damaged in no small part by generations of failed federal water management policies, undoing the damage is only sensible. Contrary what many believe, the Gulf Coast is far from “fixed”; they are still finding tar from the spill, and fisherman are still hurting.
Politically, good environmental and economic programs make sense as well. Pace the enviros, conservatives don’t want to strip-mine the earth and pave it over. The RESTORE Act is a good chance for conservatives to show their conservationist bona fides — and show why conservative environmental policies that focus on responsible stewardship of the environment and use of natural resources are preferable to left-wing command-and-control policies that see man as a threat to and not a part of the natural world.
All five Gulf states, as well as their political subdivisions charged with implementing the RESTORE Act and spending its funds, need to commit to complete transparency throughout the process. This means, at a minimum, building online databases of all spending, and project benefit cost analyses should be published as well. Journalists have a critical role to play in tracking the spending and making sure it’s on the up-and-up.
And conservatives need to call out bad programs for what they are — even when a Republican is proposing them. Mississippi’s plan to spend $15 million from an earlier settlement related to the oil spill on a minor league baseball stadium for an as-yet non-existent team stinks of cronyism and corporate welfare.
It’s important that policymakers ensure that money is spent in a way that doesn’t create ongoing liabilities for taxpayers, either as a matter of policy or a matter of politics. One of the great conservative selling points of the RESTORE Act is that it created no new bureaucracies or permanent claims on the public fisc. Undermining this principle in execution would be unfortunate.