Gov. John Bel Edwards has hit the campaign trail again, addressing four groups in three days, seeking help to lobby legislators to fix budget deficits in the nine days left before the special session must adjourn.
Legislators have been forwarding bills that, in addition to moving some funds around, would cut services and raise taxes. But the measures so far in the pipeline are still about $200 million short of the $900 million needed to balance the budget during the next four months to end out this fiscal year. State government is about $2 billion short of revenue for the next fiscal year, which begins July 1.
“I’m asking you to continue to work with me, just like you did during the campaign, but this time it’s all about governing,” Edwards told about 200 labor leaders who supported his election.
Edwards proposed to raise about $350 million by raising taxes on sales, tobacco, alcohol and telephones and by trimming tax breaks for corporations and individuals. He also sought to cut at least $160 million in government spending and use $328 million in one-time money — all to close a $900 million shortfall by June 30.
Last week, the House voted on measures to cut $100 million in state government spending, raised $210 million by increasing the state sales tax by a penny, took $128 million from the rainy day fund and took $200 million from a settlement with BP that was meant for noncoastal purposes.
But that raised only about $700 million of the $900 million needed. The bills are winding through Senate committees and, in some form, should be voted on later this week.
But the House has not heard several of the revenue-raising proposals, including those that would raise taxes on tobacco and alcohol.
Edwards hasn’t been asking for help on specific measures. Rather, he wants people to lobby the Legislature to come to a bipartisan agreement about filling the budget deficits.
“I will tell that for those legislators who insist that we can cut our way out of this problem, so they don’t vote for new revenue, yet they don’t propose new cuts, they are part of the problem,” Edwards told the labor leaders at the Louisiana AFL-CIO Annual Convention on Monday.
He hit the same theme earlier Monday with the Louisiana Transportation Conference, a gathering of officials of the state Department of Transportation and Development, consultants and vendors.
“All of our basic functions in state government are in jeopardy,” Edwards said.
Without coming up with fixes, he said, the results would be “so catastrophic” that “I do not want to go there.”
On Saturday, Edwards raised similar notes when addressing the Louisiana Federation of Teachers, one of the state’s two teachers’ unions and a longtime ally.
“I just need you to work as hard as you did during the election,” Edwards said. “I need you to gear up. Let’s work together.”
He also spoke to the Coastal Conservation Association State Convention on Saturday.
Last Thursday, he told the Louisiana Municipal Association that he was anxious to return to the State Capitol during a day when key parts of his proposed remedies cleared the state House, including a 1-cent increase in the state sales tax.
“I want to tell you it is not over,” Edwards said, a reference to passage of a hike in the state sales tax. “It is not enough in and of itself.”
The Louisiana House last week passed language that the 1-cent increase in sales taxes would last 18 months. The Senate Revenue & Fiscal Affairs Committee on Sunday amended the bill to allow the extra penny to last for five years. The full state Senate still needs to vote on the measure, then it returns to the House, where legislators had made the 18-month sunset a condition for approving the penny increase in the state’s 4-cent sales tax. (Consumers pay more in sales taxes, generally about 9 cents for every dollar spent because of the local taxes added.)
Edwards said after his speech to the Louisiana AFL-CIO annual convention on Monday that if the tax ended in 18 months, the laws governing how money can be used in the state budget would keep him from using any of the expected $210 million against the $900 million deficit, creating a significant hole in the budget balancing plans.
More importantly, he said, limiting the penny increase to just 18 months would remove that source of revenue as the state moves toward a more sound fiscal system. Many of the changes will require statewide votes to change the constitution, which would mean it could be 2019 before the revenue from that revamp could be realized.
“Sunsetting that (additional sales tax) revenue before you can transition into your new structure would be very problematic,” Edwards said. A longer end date — like five years instead of 18 months — could be repealed once the revenue needs were met.
“If we get to a place where the revenue comes in, we can repeal the penny,” Edwards said.
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