As political theater goes, last week was pretty remarkable.
Not often does a major elected official take the stage and go beyond talking about supporting the man, not the party, then actually do it.
The best reaction probably was from The Hayride, a blog that backs the GOP, which called Lt. Gov. Jay Dardenne a “liar” under a doctored photo of some sort of Quasimodo-like character wearing a “Commissioner of Administration” cap.
But overshadowing the bread and circuses of this campaign is the reality of the state’s shaky finances that Democrat John Bel Edwards or Republican David Vitter will inherit shortly.
Officials in the Jindal administration say, no worries, they’ll handle last year’s and this year’s budget problems. But, as it stands less than two weeks before the Nov. 21 general election, the incoming governor will have to fix the deficit in Fiscal Year 2015, then balance the spending in this year’s FY2016 budget with less revenue than anticipated. There’s no question that the new governor will have to tackle the operating budget for FY2017, which begins July 1, 2016, and needs about $1 billion more to cover expenses, provided the operating budget doesn’t change next year.
Only then can the new guy go after a financial structure that gives away billions, locks up billions more and comes in $1 billion or so short year after year. And each year its lawmakers rely on temporary solutions, asset sales, trust fund leftovers and accounting tricks to quilt together a balanced budget every year.
“Whoever wins, they’ll have about 30 minutes to celebrate. Then, they’re going to have to get to work,” said professor James Richardson, the LSU economics and public administration notable who sits on the Revenue Estimating Conference.
The new governor already has been receiving plenty of help with a half dozen or so special interests, good government groups and think tanks forwarding their own ideas for how best to revamp a budget structure.
The Committee of 100, a group of corporate executives who say their mission is to “attract and retain industry” in Louisiana, on Tuesday will release their plan, a mix and match menu of options on taxes. C100 hired the Tax Foundation, a Washington, D.C., fiscal policy think tank founded in 1937 by group of business executives, analyze Louisiana financial affairs and draft the report.
They recommend unifying the way state sales taxes are gathered — right now both state and local governments independently collect sales taxes — and/or start taxing professional services.
Some options recommend a graduated tax rate that retains some of the individual tax credits. Or, an alternative option would move from three brackets to a single, flat rate of 3.5 percent and eliminate the deduction for federal taxes paid and excess itemized deductions.
Robert Travis Scott, whose Public Affairs Research Council of Louisiana provided some information to the study, said North Carolina had used a similar strategy of businessmen commissioning a Tax Foundation report as the first step to sorting out its dysfunctional tax structure.
In 2013, based largely on a similar report, the North Carolina General Assembly replaced a multi-bracket individual income tax rates (topped out at 7.75 percent) with a 5.75 percent flat tax. Corporate rates went down to 6 percent and will drop to 3 percent by 2017 in North Carolina.
Already, Louisiana legislators have been looking at sponsoring bills to enact parts of the plan. State Rep. Julie Stokes, a Republican and certified public accountant from Kenner, will be spearheading some of those efforts.
Committee of 100 CEO Michael J. Olivier says his group’s analysis — and really this is true for all the plans released by other groups — is indicative that the budget problem exists; “it is serious; and it needs to be addressed thoroughly and in a thoughtful manner,” even if it takes several years.
Richardson, who helped the C100 and drafted another plan with a team of economists at the behest of legislators, says it’s also indicative of what the real hurdle will be: not which ideas will work — lots of them will — but which ideas can be embraced by the most people. No matter how it improves the financial workings of the state, some group of people will benefit, however marginally, while another group will not.
“I’ve never drafted a tax plan in which I don’t end up paying more taxes,” he said.
So the real decision about who to choose for governor is who best can sell what revamp to the state’s finances is chosen.
“Whoever is governor, whether its Rep. Edwards or Sen. Vitter, they will have to go out in public and really talk to people. We’re making long term decisions right now and we all need to be on the same page,” Richardson said..
Mark Ballard is editor of The Advocate Capitol news bureau. His email address is firstname.lastname@example.org and is on Twitter @MarkBallardCNB. For more coverage of government and politics, follow our Politics Blog at http://blogs.theadvocate.com/politicsblog/