Now that Democratic Gov. John Bel Edwards’ efforts to retain Louisiana’s oversized government have been somewhat stymied, he can respond as a statesman or a politician.
Despite access to gubernatorial tools such as capital outlay horse trades and appropriations to reward friends and to punish enemies, Edwards found state government hundreds of millions of dollars short of his preferred spending levels after a regular legislative session sandwiched between two special sessions. Perhaps overly confident that he could persuade both chambers of the recalcitrant Republican-led Legislature to approve massive tax hikes, he ended up with a budget that will cut education, corrections, and, for the first time, the Taylor Opportunity Program for Students.
Banking on threats of significant reductions in these and other areas in an operating budget already $2 billion higher than last year’s, Edwards hoped to get GOP forces to capitulate rather than face the budget ax. By approving only some tax increases, lawmakers will make Edwards account for what retrenchment will come, placing him at risk for voter wrath in 2019.
To avoid that, Edwards will fall back on his mantra of shifting responsibility. Reflexively, he’ll cite Republican lawmakers’ refusal to tax more. However, that won’t work when the public begins asking uncomfortable questions.
Why is the budget so much larger when all things seemed satisfactorily funded in past years for billions less?
Why, with allegedly money-saving Medicaid expansion, will health care spending increase by a quarter or $2.5 billion and ratepayers face elevated health insurance premiums because of higher taxes on health maintenance organizations?
Why should TOPS reductions force families to absorb 30 percent of tuition costs next year when $180 million in tax breaks will go to making movies?
Why can’t $2.3 billion in tax hikes over the past 13 months pay for everything?
Edwards also will blame former Gov. Bobby Jindal, relying upon the myth that his predecessor’s economic policies, which until Jindal’s last year cut rather than increased taxes, crippled state revenues and reputedly forced Edwards into this budgetary situation. In actuality, during Jindal’s two terms, while per capita personal income growth lagged the national average by 0.2 percent and per capita state nongovernment gross domestic product growth trailed the national average by 0.7 percent, ranking Louisiana 35th and 39th, respectively, among the states, nongovernment job growth exceeded the nation’s and ranked 10th among the states. Such performance destroys the narrative that tax cutting triggered disaster.
In reality, revenue drop-offs during Jindal’s eight years came from businesses more astutely using tax exemptions. Higher state subsidies for movies and musicals, solar panels, enterprise zones, research and development, corporate reorganizations, operating losses and local inventory taxes accounted for $1.1 billion extra exempted tax revenues in from 2008-2015. This, combined with unwillingness to tackle escalating spending, caused budgetary imbalances.
While Edwards now owns the budget he broke by holding high-value targets hostage rather than better balancing cuts and making priorities, he still has a chance to redeem himself to the public since GOP lawmakers suggested few significant reductions themselves.
For next year, Edwards can partner with Republicans in paring inefficient spending and adjusting tax exceptions on a cost-effective basis while lowering marginal income tax rates in a revenue-neutral fashion. This simplification will encourage economic development that produces enough revenue to fully fund right-sized government.
Or Edwards can remain wedded to ideology and continue only to propose intentionally painful cuts to foist fault on his opponents.
But here’s betting voters will respond better to responsible governing than demonization for political gain.
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 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 in it at http://www.laleglog.com. Follow him on Twitter, @jsadowadvocate. Email him at firstname.lastname@example.org. His views do not necessarily express those of his employer.