Despite dire forecasts that Gulf Coast governors would have to slash state budgets in the wake of hurricanes Katrina and Rita one year ago, a new report finds that booming "hurricane economies" have fueled state revenue surpluses across the region. State revenues in hardest-hit Louisiana and Mississippi swelled since the storms…

Louisiana, which many fiscal analysts forecasted would be brought to its knees economically, now projects a $759 million state budget surplus over the next two years. Mississippi is projected to have a $70 million budget surplus.


The boost is mostly due to a spike in sales tax revenues in the fiscal year that ended June 30, according to an Aug. 22 report from the Nelson A. Rockefeller Institute of Government and the Public Affairs Research Council of Louisiana. State revenues in Texas and Alabama, also hit by Katrina and Rita, were not as significantly impacted by the storms, the report found.

The report cautioned that state surpluses likely would be short-lived because they were based on unsustainably high consumer spending.

In the first release of a three-year study investigating recovery efforts in states along the Gulf of Mexico, the report found the greatest economic growth in inland communities largely out of range of Katrina’s devastating 25-foot storm surge and flooding.

Some storm-ravaged communities suffered economically but now are moving solidly down the road of recovery. Rebounding areas include: Lake Charles and Jefferson Parish in Louisiana, Jackson County in Mississippi and Mobile in Alabama.

An influx of new residents, booming construction and increased consumer spending buoyed the economies in many communities. The fastest-growing areas include: East Baton Rouge and St. Tammany parishes in Louisiana; Jackson, Hattiesburg, and Laurel in Mississippi; and Gulf Shores in Alabama. Governments there will need to deal with projected traffic congestion, and overburdened health-care systems and schools.

Many of the hardest-hit communities, especially New Orleans, have not recovered economically, mostly because of local officials’ failure to adopt comprehensive rebuilding plans and widespread worker and housing shortages. ( )

Leave a Reply