Even critics like happy endings, so there’s a more positive glow to the experts’ review of the 2011 Legislature than anyone would have predicted from their response to the previews just a couple of weeks ago.
Then, the budget process was in deadlock and legislators were toying, like children with high explosives, with budget-crashing repeal of the state income tax.
The income-tax repeal was called “unnecessary and divisive” by the Council for a Better Louisiana, and “fiscal insanity” by the less-kindly Louisiana Progress, two of the watchdog groups heavily involved in the session.
The income tax is the state’s largest source of revenue. Getting rid of it — even phasing it out over several years — poses serious threats to the state’s financial stability.
The Public Affairs Research Council panned the tax abolition bills. “A cut in individual income taxes could be a cover, ultimately, for a shift toward a greater burden on property taxes, sales taxes and business taxes,” PAR noted. “If the cut is going to be made, all of the interested parties — government, citizens and businesses — should receive the courtesy of knowing what the state is getting into.”
The income tax repeal was not the only bit of bad judgment on the tax front. Gov. Bobby Jindal contributed to a completely needless debate over renewal of a four-cents-per-pack tax on cigarettes that has been on the books for years. That led to a furious fight in the House when a majority of members voted for renewal, but could not get the two-thirds vote needed to override the governor’s veto.
Legislative independence deferred, said Louisiana Progress’ review. Eventually, the renewal was tacked onto a constitutional amendment, allowing the renewal to go forward — if the people approve in October — by avoiding another Jindal veto.
CABL called the whole Jindal controversy “an unnecessary expenditure of time and energy to accomplish what everyone knew was the right thing to do.” But CABL also noted that hard feelings in that debate bled over to tensions between the administration and lawmakers. Tuition increases at state colleges, backed by the administration but never an easy sell to legislators, were mostly blocked during the session.
So where did the happy ending come into the plot? At the end, over the larger state budget.
CABL summarized the results of dueling budget proposals: “The House flexed its conservative muscle, cut the budget and got rid of some of the more problematic funding mechanisms the governor wanted. The Senate restored the House cuts in a way that was acceptable to most of the fiscal hawks in the other chamber. And, the governor got a budget that pretty much funded all the things he wanted, though it was done in a different way than he suggested.”
Not bad for starting with a $1.6 billion shortfall in the budget? “All in all, it wasn’t nearly as painful as everyone expected,” CABL said, but one can legitimately question whether the current budget is going to avoid controversy going forward.
The additional tax breaks — yes, there were several — passed during the 2011 session provide a continuing reason for concern, and there was considerable complaint from the administration about proposed House cuts damaging state services.
“State officials and lawmakers should monitor the effects of these budget cuts to determine if and when they might have a damaging effect on public service, internal controls and agency performance,” PAR said.
We suspect that accounting will have to wait, though, as the governor and most lawmakers apply themselves to re-election in October and November. After that, the critics will be able to see how the new budget movie has played at the box office — and how happy the ending turned out to be.