The worst thing the state can do as it comes to terms with declining revenues is raise taxes, state Treasurer John Kennedy said Wednesday.

“Don’t raise taxes, do not raise taxes,” Kennedy told a joint meeting of the New Iberia Rotary Club and Optimist Club of New Iberia.

“Raising taxes would be the wrong thing to do. It doesn’t do any good. ... You cannot tax yourself into prosperity.”

State Treasurer John Kennedy speaks to a joint meeting of the New Iberia Rotary Club and Optimist Club of New Iberia Wednesday. Advertisement

The state’s budget increased drastically after the 2005 storms, due to the money and jobs put into the economy for rebuilding after the devastation. It amounts to billions of dollars from, among other things, insurance claims and government recovery money, said Kennedy, R-Baton Rouge.

“This income never lasts,” he said.

Because of the storms, Louisiana far outspends other southern states in comparison. Examples Kennedy gave included South Carolina at $19.8 billion, Missouri at $21.4 billion, Kentucky — which has about the same population as Louisiana — at $22.3 billion and Tennessee — which has about 45 percent more people than Louisiana — at $24.8 billion.

Louisiana’s budget in the current fiscal year had a shortfall in revenue by about $1.3 billion, Kennedy said. Next year, the state treasurer anticipates the shortfall to be about $2 billion and up to $4 billion over the next few years.

Some things the state can do to help balance its budget is to reduce the number of state workers, Kennedy said. The state has about 104,000 state employees, compared to Alabama, which serves a larger population, that has 80,000. He suggested that through attrition, the state could eliminate up to 5,000 jobs each year over the next three years and save $600 million.

“We have to be smart about it,” he said, not just eliminating all jobs that become vacant. And there are plenty from which to choose, he said, as the turnover rate for state workers is about 22 percent.

The state also should do more to collect the money it is owed, which Kennedy said is $1.8 billion.

About $1.1 billion of that money is six months past due.

“No business would remain in business very long” operating like that, he said.

Kennedy also said the state needs to monitor its debt, which is about $5.2 billion.

That amounts to $1,186 for every person in the state.

That debt is only the money the state has borrowed to build things.

The state treasurer also said Louisiana ranks ninth in the nation in per capita spending.