I would love to see an audit of the books. The difference between States -- or countries -- being successful, or not, is the number of people who are working and paying into the system. If they are not working and it becomes a "Class" system of rich and poor then sooner or later the chickens come home to roost. Lack of education, lack of will, lack of jobs and access to cheap drugs breeds poverty and pulls us all down.
That's part of it, but there are number of factors as well. Geography (much of LA. is undeveloped and some uninhabitable), lack of new industry, etc. It is a self-perpetuating cycle that has been getting worse for decades. The poorer it gets, the worse the services get, the worse the economy is, which means fewer new businesses, which means fewer jobs.. which means the economy gets worse, thus the cycle. It was an agrarian economy for years and New Orleans found itself even more limited by it's location, could not grow like other cities.
Yet it still managed to be a jewell in its own way. It *might* be rebuilt, but will never be the same.