New Orleans
may be the fun capital of Louisiana, but Baton Rouge is on the fast track to be
the economic capital. The Standard and Poor’s Rating Service just
upgraded Baton Rouge’s credit rating to ‘AAA’, the highest in the state.
While New
Orleans has chosen to rely almost entirely on tourism to support its economy,
Baton Rouge has chosen to take a more realistic, diversified business
approach. One less influenced by the whims of the national economy.
Even though
Baton Rouge is our capital city, it has always played second fiddle to New
Orleans. However that appears to be changing. While Standard and
Poor’s assigns a lower rating of ‘A’ to New Orleans, the Finch Rating Service
just recently downgraded New Orleans to the negative category of ‘A-‘. This negative outlook is based on the city's finances, which remains a
credit weakness. Efforts by the current Landrieu administration to regain
structural budgetary balance have shown gains, but new challenges in the form
of jail and police mandated spending, and fireman pension contributions place
additional pressure on the city’s operations.
Additionally, the city continues to depend
heavily on federal recovery monies from Katrina to help finance its
infrastructure needs. Soon these funds will cease.
While the residents of New Orleans continue
to feverishly defend their city as the best city for partying and eating in the
world, maybe it’s time for them to pull their heads out of the sand and
face the realities of our present day economic system for city survival.
Presently, New Orleans relies
disproportionately on federal grants for its budgetary needs. A funding
source destined to be drastically reduced due to the present political agendas
operating at the national level.
Bottom line, New Orleans can no longer
continue to survive on a t-shirt, tourism economy. As repulsive as this
may sound to New Orleans, it’s time to take a lesson from Baton
Rouge.
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