“Obviously this disaster changes everything,” Commissioner of Administration Jay Dardenne said Thursday while talking about the impact of heavy rains that turned into historic flooding last weekend.
Ten days ago, revamping the way state government raises and spends money was the primary focus of Louisiana lawmakers and was supposed to be for the next 10 months.
Usually disasters take precedence and ongoing projects are put aside for the duration. This, however, is a little more complicated.
The short-term solutions used to balance this year’s budget relied on temporary taxes that roll off pretty soon. That means lawmakers can’t just wait. They’re going to have to pursue fiscal reform, a herculean task under normal circumstances, at the same time they handle disaster relief and restoration.
Dardenne, the administration’s chief budget architect, and Gov. John Bel Edwards haven’t had a chance to figure out what to do about the fiscal revamp project.
Edwards is still mostly in search and rescue mode as the floodwaters move further south, threatening more people. He's also starting the first phase of trying to get life back to normal in the areas where water has receded.
Dardenne has been busy scrounging around a fairly bare cupboard looking for enough cash to pay for all of this – $12 million for the first six days. But the overtime and supplies bills haven’t come in yet, and they should be substantial. The National Guard, for instance, costs about $800,000 a day.
Though Louisiana's state government officially wasn’t working Thursday, the pressure of payi…
Those dollar totals will grow exponentially when recovery really starts to kick in later this week. True, the federal government has pledged to reimburse 75 percent of the costs, but state government has to pay the bills first.
Structural fiscal reform is way too esoteric a subject for people who have lost their homes and want nothing more than to get their lives back in order, said state Sen. Eddie Lambert, a Prairieville Republican who had spent much of last week in a boat helping Ascension Parish deputies evacuate entire subdivisions from floodwaters.
“I mean, Ascension is going to have a serious, serious housing shortage,” the Republican said, adding that a lot of those homeowners won’t have adequate insurance and will need help.
“That’s what people will be focused on and that’s what they’ll expect us to be focused on,” Lambert said.
Officials continue to work on a housing plan for the thousands of victims have been displace…
Recovery, obviously, has to be the first priority, but the state really can’t put off the fiscal revamp, said Senate President John Alario, who more than anyone else will be called upon to push the bills that start repairing the state’s finances. And while it’s somewhat insensitive to chat about money at a time when people need to be rescued, if nothing is done to stabilize the financial system, the state will again find itself on the brink of catastrophe, said the Westwego Republican with 44 years of experience in the Legislature. “It’ll be difficult to do both, but something has got to happen,” he said.
House Speaker Taylor Barras agreed. “It’s just going to have to be done, there’s no two ways about it,” the New Iberia Republican said.
A spider web of exemptions and credits make Louisiana taxes appear onerous. But so many special interests receive so many breaks that ultimately the system brings in too little money to actually pay what the state owes. On the spending side, a series of laws lock in funds and limit budgeting flexibility.
Each tax exemption and each funding dedication has a constituency that fights to protect its break.
The Task Force for Structural Changes in Budget & Tax Policy has been meeting over the past several months to come up with a plan. The deadline for its report is next week on Sept. 1 – to allow time for legislators to craft bills that would put those ideas into law – though that could be postponed.
Much of the research has been done, and rough ideas have been sketched out, said Robert Scott, a member of the task force, along with Dardenne, and head of the Public Affairs Research Council of Louisiana, a Baton Rouge-based government policy research group.
But the group has been unable to meet to nail down the final details for a plan that likely will involve lowering the overall rates while broadening who has to pay taxes, he said.
“I don’t want to think about these things right now,” Scott said. “The real focus will have to be on people. It’s hard to turn your attention from that to the state’s very real economic problems, but that’s something that eventually we’re going to have to address.”