The fight over how to keep Louisiana government running has been an epic battle, running two years, encompassing seven special and regular legislative sessions, and thoroughly preoccupying the executive and legislative branches of government.
But this weekend, as tempers flared, fingers pointed and the most recent attempt to right things teetered on the brink of collapse, The Advocate's Tyler Bridges offered an overdue dose of perspective. For a fight that has loomed so large over state politics, the stakes are actually pretty small.
Not at the macro level. With nearly $1 billion in temporary sales taxes approved in 2016 set to drop off the books July 1 — taxes that were put in place so that lawmakers would have the time to come up with a more stable revenue structure, which they never did — and with every major spending area but higher education and health care largely shielded from cuts, the impact of any policy change is major.
We're talking about the difference between whether the state can guarantee it will offer full TOPS scholarships, whether its private hospital partners need to send out layoff notices, and whether families that rely upon state support to keep disabled loved ones at home can continue to do so. We're also talking about whether Louisiana can convince national credit rating agencies that its finances are stable. Serious stuff all.
But looked at on a per-household basis, as Bridges did with the help of LSU Professor Jim Richardson, things aren't nearly so daunting.
Keeping a quarter of the temporary one-cent sales tax increase, the proposal most acceptable to responsibly minded Republicans who are willing to support any tax at all (as opposed to those who simply refuse), would cost households earning between $100,000 and $125,000 a year about $60, Richardson estimated. This approach is more popular among those who want to spread the pain to everyone and would raise $220 million.
But the idea is less popular among Democrats, who note that poorer people spend a greater share of their income on consumer goods, and therefore pay proportionately more when sales taxes are raised. Still, lower income households, those making less than $25,000 a year, would pay just $40 a year under the proposal, or $3.33 a month. Remember that food, utilities and prescription drugs remain exempt from state sales tax under the otherwise-dismantled Stelly Plan.
A more popular idea among Democrats — ending the current ability to deduct state and local tax payments from the prior tax year — would mostly hit the four percent of Louisiana households earning at least $200,000 a year. Those families would pay an additional $400 to $600, which is hardly going to break the bank of someone at that level or deter any investment they might otherwise make. The proposal would raise about $79 million per year.
The one idea in play that would impact the upper middle class is the least likely to ever become law. The Legislative Black Caucus has been pushing to adjust the tax brackets, but Gov. John Bel Edwards hasn't embraced the idea, given that conservatives are unlikely to agree. The idea would cost families earning $50,000 in taxable income, or $70,000 to $75,000 overall, $500. Families earning $100,000 in taxable income would pay an extra $1,000. But again, that's unlikely to ever happen.
Nobody wants to pay more taxes, of course, but the more realistic possibilities are hardly severe enough to change most people's financial trajectories. They certainly don't seem to warrant the extra time and expense of all those special sessions, the intense partisan jockeying, the sheer frustration and the overblown hysteria over the very thought that people might be asked to pay a little more.
I know that's a hard argument to make with the next election year looming and attack ads beings drafted as we speak. It would be easier, though, if more people involved would focus on the particulars and let the political chips fall where they may.
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Matt Houston/LSU Manship School News Service