Somewhere between a patch and a fix, tax increases or rollback of giveaways, Louisiana’s budget remains in a state of flux over the Memorial Day weekend, with a great deal not settled and the clock ticking toward the end of the legislative session on June 11.
But in a Legislature of two chambers, House and Senate, the former argues that it’s done a lot to avoid the damage in the budget proposal from Gov. Bobby Jindal. House proposals are now handed off to the Senate.
Serious cuts to colleges and universities have been averted, mostly by the House’s bills to cut back on lavish tax breaks granted to business and industry over the two terms of Jindal’s administration — by many of the same legislators now waking up to the revenue losses. A modest increase in cigarette taxes is also on the House agenda.
Now all this goes to the Senate, where President John Alario, R-Westwego, wants to reconcile Jindal’s wishes against any and all tax increases — by the governor’s stringent definitions — with the House’s calls for changes that will result in more revenues to prop up the budget.
If this all seems a bit murky, it’s because the situation is murky.
The Senate debate is overshadowed by political considerations, including Jindal’s protests against some of the revenue-raising proposals, but what ought to worry ordinary citizens is less the impact of the tax increases than the concern that this year’s increases will not solve the budget problem.
Much of the Senate additions to the House plans will include more use of one-time money to pay for operating expenses, the poor financial policy that Jindal and legislators have used for years to avoid paying the state’s bills. Short-term cuts of 20 percent or so in tax breaks for businesses are not meaningful responses to a tax system so inefficient that it can’t generate revenues in a growing economy.
Add one bit of pressure on revenues — declining oil prices, since last summer — and what the economists call state government’s structural deficits turn into immediate crises.
Just like the crisis we’re in now.
The House can congratulate itself, as Rep. Jim Fannin, R-Jonesboro, said on solving “85 percent of the problem.”
That’s this year’s problem, or at least that part of it “solved” by ignoring Jindal’s threats to veto the budget if he does not get his way.
What is profoundly less encouraging is that this year’s fixes are only patches, and the revenue-raisers are only short-term rollbacks of unaffordable largesse to business and industry over the past decade. We’ve been giving away Louisiana’s revenues; The Advocate last year reported on the ballooning cost of the tax breaks.
The gap between revenues and expenses has been met with one-time money and by raising college tuition and other fees.
It’s not conservative policy to refuse to pay one’s bills. The new budget now so murky might, in a best-case scenario, put off the day of reckoning until after the fall election for governor, Legislature and other offices. But the structural deficit problem will still be here, unfixed.