As president of the Louisiana Association of Business and Industry, Stephen Waguespack occupies a particular perch that is supposed to take a wider view of the state’s problems, including a yawning budget deficit that threatens the viability of state colleges and universities that train the next generation of Louisiana’s workforce.
Instead of statesmanship, we get sermonettes on how bad taxes are, an echo of Gov. Bobby Jindal, whom Waguespack served faithfully as he drove the state budget into its current ditch.
It’s out of touch with reality, and before this session is over, Waguespack’s true-believer theology will be sorely tested: It’s not good economic policy, nor conservative policy, for state government to fail to pay its bills, particularly to the tune of $1.6 billion in shortfalls. That’s conservatively estimated; Jindal’s numbers are always something of a crap shoot.
If people think that Waguespack is toadying to his former boss, that would be wrong on several major issues, including the Common Core educational standards that LABI staunchly supports. There’s even a rare bit of direct criticism of Jindal in Waguespack’s first column on the session: “The unquenchable thirst for more of your dollars for government is simply drowning out any talk of the private sector,” he said. “Even the governor’s speech to kick off the legislative session gave private sector growth only a passing comment before he then talked about the importance of raising taxes on inventory.”
“The lack of interest in learning the lessons of our growing private sector should be scary for anyone hoping for good economic policy to come out of this session. The money grab is on and folks don’t care where the money comes from,” Waguespack said.
Well, that’s something that should be challenged on intellectual grounds. According to the conservative-leaning but nonpartisan Tax Foundation, Louisiana has one of the lowest burdens of state and local taxes in the country.
LABI and many others have pointed out that this burden is poorly distributed but fixes for that require more flexibility — somebody’s taxes go up if you adjust somebody else’s — than Jindal and Waguespack showed in office. The dogma of no-tax-increases gives precious little scope for real tax reform; Jindal actually killed the people’s decision for tax reform when he repealed much of the landmark 2002 Stelly tax plan.
Good economic policy, right now, can and should include rolling back some specific business tax breaks granted willy-nilly in the good times. That won’t change Louisiana’s tax burden much at all, and economists by and large don’t see state tax policy as driving economic growth.
We’re early in the short session and there are many bills in play that would raise revenues one way or another. LABI is pretty consistently opposing them, particularly those that would take away businesses’ big subsidies from taxpayers. Is this a sustainable position come the fateful days before the June 11 adjournment?
In another context, on local government subsidies, the scholar Benjamin Ross wrote recently about “the St. Augustines of the free market — end government regulation and make me chaste some day, they pray, but don’t take away my subsidy just yet.”
Give us free enterprise, LABI prays at the altar of Grover Norquist, but don’t take away my subsidy just yet.
Lanny Keller is an editorial writer for The Advocate. His email is email@example.com.