State Treasurer and U.S. Senate candidate John Kennedy said Wednesday the state can address its immediate, $750 million shortfall without raising taxes.
“The problem is on the spending side,” Kennedy told the annual meeting of the Hispanic Chamber of Commerce of Louisiana.
“We need to get our costs under control,” he said. “Until we do, I don’t think it is fair and right to deliver the largest tax increase in the history of the state.”
The Republican said Democratic Gov. John Bel Edwards’ list of possible income, corporate and other tax hikes to tackle the shortfall is “pretty breathtaking” and premature.
Kennedy said the state can take steps — some politically painful — to solve what officials say is a shortfall of up to $750 million by June 30.
He said eliminating 156 special state funds — called statutory dedications — would quickly raise nearly $500 million.
Many of those funds amount to “politicians’ honey pots,” Kennedy said.
“Most of them are not as important as we say our priorities are,” he said.
Asked if the governor wanted to comment, Edwards spokesman Richard Carbo said Kennedy should identify which statutory dedications should be cut and how much that would save. “We would urge the State Treasurer to bring his specific ideas to the table and work with us to develop a strategy,” Carbo said in an emailed statement.
The Legislature is set to meet in a special session starting Feb. 14 to address Louisiana’s budget crisis, which experts call the worst in three decades.
A $1.9 billion shortfall is predicted for the financial year that begins on July 1.
Kennedy, who was elected to his fifth term as treasurer in October, is known for his blunt-speaking manner aimed at rank-and-file taxpayers.
“Welfare was meant to be a bridge, not a parking lot,” he said in his announcement Tuesday that he is entering the race to succeed U.S. Sen. David Vitter, R-Metairie.
The treasurer joins two announced Republican candidates, U.S. Reps. Charles Boustany and John Fleming. Another GOP contender, retired Air Force Col. Rob Maness, officially announced Wednesday that he, too, would seek the post. Maness ran unsuccessfully for the Senate last year.
Kennedy said the state has a moral obligation to find ways to lower costs while delivering a quality product.
Others argue that, after years of budget reductions, the current shortfall has to include tax hikes, not just spending reductions.
Kennedy said other steps that would address the $750 million shortfall include canceling some of the state’s 19,000 consulting contracts, rethinking how state employee managers oversee an average of four classified state workers and finding ways to curb Medicaid costs, which account for nearly 40 percent of the budget.
He told the 110-member audience the state’s $25 billion operating budget is adequate, especially amid a dwindling population and inflation of less than 2 percent.
“It is hard to argue that Louisiana does not have enough money,” Kennedy said.
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