In the nicest possible way, the state’s business leaders are calling out the failure of the special session to advance meaningful tax reform in Louisiana.
Before the final numbers were in for the special session, the Committee of 100 for Economic Development issued a statement about the failure of the bills to balance the budget — even “after cuts in spending by Gov. (John Bel) Edwards to the maximum allowed by law.”
The committee’s statement was a serious recognition of the continuing financial difficulties confronting the state. “Because we are now facing the eighth consecutive year of midyear cuts caused by budgets based on grossly overestimated revenues and underestimated expenses … our options are extraordinarily limited,” the committee said. “The $2 billion of midyear cuts since 2008 have burned through our safety margins and reserves while we have experienced multiple years of disinvestment in higher education and health care, both of which facilitate the success and well-being of our citizens and our economy.”
Colleges’ accreditation is among the valuable assets at risk, the statement said, as are the public-private partnerships overseeing public hospitals.
The record of the special session was in short-term fixes, particularly the bills making Louisiana the highest state in the nation for combined state and local sales taxes.
The sales taxes, the committee said, “will create the revenue that our state needs quickly but is not a sound means of financing our state’s operations for any longer than is necessary.”
The upshot of the special session was that more cuts are necessary before June 30, and the budget is an estimated $750 million shy of operating costs for the new year beginning July 1.
We hope that the message of the Committee of 100 is heard by legislators. Short-term fixes are not enough.
The committee worked with the nonpartisan Tax Foundation to generate tax options that replace Louisiana’s out-of-date revenue system. It is available at www.C100LA.org. The study — and not the committee’s alone, but others by reputable researchers — require that lawmakers not only patch today’s budget hole but generate future tax growth that will pay for state obligations, not push them off into future years.
That’s how, as the committee’s statement reminds lawmakers, we got into this mess.