Expect Gov.-elect John Bel Edwards to holler gloom and doom in his inaugural address Monday to try to obscure the truth about Louisiana’s bloated government.
If he stays the course he took as a legislator, Edwards will govern as the most extreme leftist since Huey Long. But knowing that agenda runs counter to the state’s majority, he’ll initially put much of his intended program on the back burner. Prior to attempting to ram it down the people’s throats, he must build up credibility as a policy leader so constituents will willingly open their mouths to get his bad medicine in the years to come.
Edwards can gain trust by “solving” budgetary gaps over the next 18 months he now claims total at least $2.65 billion. Unfortunately, he will try to do so using the largely failed methods employed for this year’s version: raising taxes.
While policymakers seem puzzled by the several hundred million dollars in tax increases that should have “solved” a revenue shortfall for this fiscal year but instead provoked a deficit into the $750 million range, basic economics explains this deficit. Simply, tax increases imposed onto a state economy with its major petrochemical sector in depression, combined with a national economic environment still reeling from liberal policies that caused the worst recessionary recovery in history, stunted economic growth and thus curtailed state government revenue.
Yet count on Edwards to double down on ineffective policy. Because he and legislators will focus on raising revenue, they’ll target not only wasteful tax exemptions but tax breaks that actually benefit the economy, just as lawmakers did last year.
Worse, Edwards will try to claim that the grave need to erase the red ink requires increasing tax rates and/or reducing deductions. This mischaracterization allows pursuit of his hidden agenda, which is growing government. That philosophy denies an essential truth: Louisiana never has had a revenue problem but a spending problem.
Among the states, Louisiana ranks 22nd in per capita state spending (2013 data), which actually understates the bloat. Including local government spending puts it in 10th place. Federal aid does not cause this inflated spending rate. Louisiana ranks only 23rd in per capita federal dollars received, so state policy decisions drive it higher. Magnifying state taxpayers’ agony further, in the typical state, local governments get about 27 percent of their revenue from the state. In Louisiana, that figure climbs to almost 30 percent.
Even worse, given its cost of living, Louisiana outspends considerably almost all of its peer states. Among the 34 states that were plus or minus 10 from Louisiana’s score of 93 on the federal government’s most recent cost-of-living index — meaning every state except those in the New England and far west regions and excluding Maryland, New Jersey, New York and South Dakota — it had the fourth-highest per capita state and local spending. And relatively lower living standards that create greater social services demands don’t explain Louisiana’s outsized spending. Among these 34 similar states, Louisiana places 18th in per capita income.
The fact is, if Louisiana just spent at the same level as its peers, it would spend 19 percent less than it does now, bringing state government annual savings of almost $5 billion. Granted, the state’s Byzantine political structure surrounding fiscal matters makes it difficult in the short term to capture these savings. But these data do make it clear that when Edwards alleges “we simply cannot cut our way to a balanced budget,” either he remains ignorant about the state’s profligate spending or he lies.
Jeff Sadow is an associate professor of political of political science at LSU Shreveport, where he teaches Louisiana government. He is author of a blog about Louisiana politics at http://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 at http://www.laleglog.com. Follow him on Twitter, @jsadowadvocate. Write to him at email@example.com. His views do not necessarily express those of his employer.