Gov. John Bel Edwards’ narrative last week was “urgency,” as in the Louisiana Legislature needs to stop fiddlin’ around and get down to the burning issue of repairing the way the state taxes and spends.
The Democrat talked of the need for swift and persistent action in his speech opening the 2017 general session on Monday, in talking with business leaders at an economic development summit on Tuesday and with editorial boards of newspapers around the state throughout the week.
On Wednesday morning, the Senate voted to declare May 26 “John Wayne Day” and headed home. House members stuck around – Speaker Taylor Barras was serving steaks that night – and came in Thursday morning to hear a Belgian politician speak to them in French, picked up their per diem, then most headed home before lunch.
Over the past nine years, the governor says, Louisiana has built a financial house of cards that doesn’t raise enough revenues to pay for the services promised, gives out tax breaks for corporations who promised but haven’t always delivered more jobs, and relies on a sales tax rate that, when combined with local levies, averages the highest in the nation. The mélange of fiscal rationalizations has forced state government to rebalance the budget – 16 times over the past nine years – usually in crisis situations that generally require pell mell hacking of public services.
The big New York financial agencies have noticed the instability and downgraded the state’s credit rating, which translates to Louisiana taxpayers dishing out more for the loans to fund projects, like adding more lanes to highways.
Edwards argues that legislators need to tackle a budget for the fiscal year that begins July 1, which he predicts will be $440 million short if lawmakers want next year’s services at the same level as this year. At the same time, through structural changes, they should also address how to cover the loss of $1.3 billion when temporary increases in taxes automatically end on June 30, 2018.
Edwards presented an ambitious, though not fully articulated, plan of lowering taxes for some, raising taxes for others. He says his plan will provide a more stable source of income that is distributed more fairly among the state’s taxpayers – read: corporations and higher income taxpayers will have to pony up more.
Republican legislators don’t see the imperative.
GOP leadership – Barras, House Appropriations Chairman Cameron Henry, and House Majority Leader Lance Harris – argues that the budget was pretty much balanced in February’s special session. Their argument is that the shortfall for the fiscal year beginning on July 1 can be covered with modest cuts in spending and the hope that the Revenue Estimating Conference will determine officially that improvements in the overall economy will increase tax collections, royalty payments and other pots, thereby giving state government more money.
And that $440 million “deficit” that Edwards talks about? The Republicans say it includes some of the inevitable costs of running a big organization – like a rise in the price of health insurance – but it’s chock full of little extras that the governor wants.
Edwards counters that his $440 million number includes items like the cost of living increases for public schools, which often have been left off the budget, requiring administrators to divert money from the classroom to, say, pay the increased cost of gasoline. Therefore, this is a continuation budget and not a frill.
This argument over whether the deck chairs should be facing east or southeast kind of misses the iceberg ahead.
At the risk of straying off the “Blame Bobby” narrative – one of the few areas of agreement for leaders in both parties – the budgets proposed by Bobby Jindal as governor all included deep, deep cuts to programs. It was the legislators, most of whom were Republican, who couldn’t stomach the virtual end of some of those services. Those members included Edwards, Barras, Henry and Harris.
A lot of the razzle-dazzle accounting came about because of legislative opposition to cutting services coupled with Jindal’s insistence that the taxes be kept low and business tax incentives kept high to spark an economic surge in the private sector that never materialized.
The task for the Legislature is sorting out a mess largely of their own making.
Like 8th graders, legislators don’t start working on their semester project until the night before it’s due. Rep. Gene Reynolds, a former educator who heads the Democratic minority in the House, said, “We may very well end up having a constitutional convention that will wipe the tax code clean and we can start over from scratch.”