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BP Suit Dangles New-But-Familiar Windfall Carrot Before States

February 27, 2013 by  

BP Suit Dangles New-But-Familiar Windfall Carrot Before States
On April 20, 2010, the offshore oil rig Deepwater Horizon exploded in the Gulf of Mexico.

The long-simmering civil suit to assay the extent of British Petroleum’s negligence leading up to the 2010 Deepwater Horizon Gulf Coast disaster began Monday.

But whether the case ever makes it through a trial — or ends up in a settlement — is almost irrelevant for the States certain to get a payout.

Think about it: There is almost no chance that Alabama and Louisiana — the two States formally attached to the suit — as well as Florida, Mississippi, Texas and the U.S. Department of Justice won’t see BP money before it’s all over. And it will probably be a lot of money, especially for the three less-populous tax base States between Florida and Texas.

Those States’ poorer general fund and education budgets get a little tingly when they smell free money. And the custodians of public funds, regardless of their day-to-day fiscal rhetoric, get positively giddy.

The belt-tightening lip service State leaders pay to the handling of public funds has a reliable tendency to dissipate utterly when the opportunity to aggrandize public coffers at the expense of the private sector appears.

Want examples? Just Google “State general fund windfalls” and order a pizza.

Lotteries, lawsuits, revenue-raising referenda, “found” money, tax projections that turn out to have been pessimistic: all these, and more, provide States — not only in the South, but across the Fruited Plain — the year-by-year deus ex machina their Governors and legislatures need to keep constituents grateful for the last-minute budgets they manage to pass.

Now there’s talk of a settlement in the Deepwater case. Leaving aside BP’s culpability (or its absence) in the ordeal, you can bet State heads in the South are imploring their attorneys general to go for the surest play. In all likelihood, that’s a settlement of the civil lawsuit.

The boilerplate fiscal values of Governors, legislators, cabinet appointees and public service commissions — ultimately, of any State-level official who inherits his little slice of the labyrinthine and pervasive administrative structure supported by each State’s general fund — are ephemeral when the prospect of a quick score rears its head. Due process — yes, even for an international megacorporation loathed both by environmentalists and people who put gas in their cars — doesn’t get a lot of spotlight from State Houses.

State leaders send a message to their citizen bosses and benefactors when they spend the months before a tough legislative session talking about steep budget cuts, reductions in staffing for courts, law enforcement, state-run mental hospitals and pretty much everything else. (Roads and teachers are sacred cows of the political cycle and are usually safe from devastating harm.)

The South’s elected fiscal conservatives, such as they are, reached office in part on the strength of tough talk about bloated government, redundancies in State services, welfare-state public employees (except for teachers!) and getting back to the business of carrying out no more and no less than the tasks of office as ordained in each State’s constitution.

When those same leaders ramp up the rhetoric for each year’s budget fight, the talk is always about tough decisions, too many “needs” and not enough dollars, and how proud they are that the people who elected them share their austere approach to fiscal policy and will “please bear with us” as they feebly shore up — but never, ever eliminate — all the big-government programs, entitlements and agencies they were elected to trim or to end outright.

When Alabama, Florida, Louisiana, Mississippi and Texas get their BP dole, you can expect it to be absorbed into their State budgets to the maximum extent the settlement agreement will allow. There will be earmarks for environmental reparation, as well as other qualifiers regarding where a portion of the money goes, but every discretionary cent likely will be padded in to each State’s business-as-usual operating budget next year.

With few exceptions, State programs don’t die. Their near-miss budgeting survival, year in and year out, leaves the public with the vague impression that they’re absolutely crucial and, probably, mandated by that State’s Constitution or the Constitution of the United States.

For politicians of any stripe holding the public purse strings, that’s a pleasant lie. Along with State taxes and fees that either stay level or increase, erratic windfall money keeps State leaders everywhere addicted to the superfluity of big government.


Ben Bullard

Reconciling the concept of individual sovereignty with conscientious participation in the modern American political process is a continuing preoccupation for staff writer Ben Bullard. A former community newspaper writer, Bullard has closely observed the manner in which well-meaning small-town politicians and policy makers often accept, unthinkingly, their increasingly marginal role in shaping the quality of their own lives, as well as those of the people whom they serve. He argues that American public policy is plagued by inscrutable and corrupt motives on a national scale, a fundamental problem which individuals, families and communities must strive to solve. This, he argues, can be achieved only as Americans rediscover the principal role each citizen plays in enriching the welfare of our Republic.

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  • RivahMitch

    Extortion does not become ethical simply because government is the perpetrator.

    • Robert Smith

      Are you suggesting that the corporation has no responsibility for the fire, death, and spill?


      • RivahMitch

        Not at all. However (i) they’ve already paid >$20B, (ii) the actual distribution of liability among the several companies (and the Government(s) that may not have done their job) and. (iii) the fact that the governments are seeking more money to squander without regard to the actual damages done lead me to believe that this is simply an attempt by the various parasitical governments to grab money for their own nefarious purposes.

      • Vigilant

        Corporate responsibility is not the issue here, RS. You would do well to read the article again, this time with comprehension.

        It’s about the usage of awarded funds to plug budget holes and fill the general fund coffers of the states. How much of these awards will go for shoring up environmental safeguards? How much will be used to challenge EPA in court for its feckless moratorium on shallow water drilling, i.e., the same rule that exacerbated the tragedy. Were it not for this stupid regulation, the fire and spread of oil would have been much more quickly contained.

        Read concerning the ultimate disposition of the $206 billion tobacco suit (1999) award to 46 states, and you’ll see that Mr. Bullard is correct. The greedy and avaricious states don’t give a damn about health or the environment.

    • eddie47d

      Businesses of all persuasions need to pay up as fast as possible for any and all damages. If the states want money from this spill it should go directly to the environment (beach clean up and restocking of species) and the fishing industry . The BP ads on TV say everything is hunky dory and they have done their part. I’m skeptical of those claims because they haven’t payed out the 20 billion they promised.

    • Chester

      Apparently, you feel that in excess of twenty BILLION is more than enough to repay all the people who were affected by that spill. Of course, very little of that money ever actually went to the people who were either laid off, or simply unable to do their normal work while all that spill was being “cleaned up.” Truthfully, more of that money has gone into lawyer’s pockets than to any of the people who were affected, and none at all has gone back to the states who LOST tax revenues due to the spill. Do you honestly think that what BP is handing out is FREE money? I don’t see it that way at all, and neither would you if you had been affected by that spill, other than possibly slightly inconvenienced by not being able to get your fresh Gulf oysters.

      • eddie47d

        Yes those pesky lawyers who generally receive 40% of any take. Robber Barons to say the least!

  • http://personallibertydigest Mike Blossom

    nice we consumers will be giving the states more money just like the tobacco farce. Do you really think BP will be paying this out of their own pockets? A ten cent raise in gas prices will cover all the fines and penalties assesed to BP. Right out of MY pocket.

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    We’re a group of volunteers and opening a new scheme in our community. Your web site offered us with valuable information to work on. You’ve done a formidable job and our entire community will be grateful to you.


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