Louisiana enjoys some spectacular February traditions: Carnival parades roll, baseball and softball begin, mudbugs become commonplace cuisine ... and, of course, the governor calls the Legislature into special session.
After the House of Representatives’ Republican leadership ignored a series of retreating deadlines and dwindling conditions that Democratic Gov. John Bel Edwards placed on his convening the Legislature early, Edwards with his back against the wall declared victory and pulled the trigger. This meeting will mark the third consecutive year he has called in lawmakers prior to the Legislature’s regular session.
This exercise has become part of the state’s February landscape because, throughout his term, Edwards has conflated tax reform with higher taxes. His attempts to enact this philosophy in 2016 and 2017 extra sessions produced nothing more than a temporary 25 percent hike in the sales tax rate and a hodgepodge of suspended tax exemptions, all scheduled to end June 30.
Edwards’ attitude has frustrated GOP legislators, who see tax reform as a means to spur economic development that drives higher revenues into state coffers, not as a device to confiscate more of the people’s money. They envisioned the transient increases as a bridge to implementation of their vision, which coupled with spending restraint would erase chronic deficit projections.
But Edwards had enough political muscle to send spending higher. From fiscal years 2016 to 2017, general fund spending went up 5.1 percent, other state funds spent increased 8.7 percent, and federal funds expended (thanks to Medicaid expansion) rose 32.4 percent. These ranked, respectively, sixteenth, seventh, and first among the states.
In other words, minus federal funds, had state spending stayed at the rate of inflation, there would be no “fiscal cliff,” the deficit between current spending and projected revenues caused by the cessation of temporary tax increases. The bridge was there, but Edwards stubbornly refused to cross it.
So, we’re back to where we were each of the last two years: Republicans, at least in the House, still want to see fiscal reforms that grow the economy and not government, while Edwards endorses the opposite. Nothing has changed, and nothing will change, as the call issued by Edwards for the special session suggests.
The call allows legislators to make permanent temporary tax increases enacted in Edwards’ last year as a legislator and first year as governor, skewed toward increasing levies on incomes and taxing sales of services rather than staying with a higher tax on existing taxable sales. It also contains Republican demands focused on Medicaid that could lead to tighter vetting for eligibility, co-payments, and work-related requirements for its recipients, as well as potentially lowering the state’s expenditure limit.
That agenda puts the two sides at loggerheads. These Medicaid reforms alone won’t reduce the deficit sufficiently, and Edwards won’t accede to an expenditure limit much below this year’s spending. Republicans won’t allow a tax structure that bakes in much of the temporary increases, especially if concentrated on incomes.
But House Republicans have the upper hand because tax increases of significant size require two-thirds approval and they have the numbers to sideline whatever they don’t like. And if Edwards turns down whatever the GOP offers on taxes that forces him to slash government services, he knows he will bear all the blame in the eyes of voters and lose any chance at re-election.
Edwards with his government growth quest is the problem, not the solution. By extending a portion of the temporary sales tax for two years, the GOP can buy enough time for voters to deny him a second term. With his departure, genuine tax reform and right-sizing of government can commence.
Jeff Sadow is an associate professor of political science at Louisiana State University-Shreveport, where he teaches Louisiana government. He is author of a blog about Louisiana politics at www.between-lines.com, where links to information in this column may be found. When the Louisiana Legislature is in session, he writes about legislation in it at www.laleglog.com. Follow him on Twitter, @jsadowadvocate or email firstname.lastname@example.org. His views do not necessarily express those of his employer.