Gov. John Bel Edwards has proposed a 1-cent sales tax as a bridge to fiscal reform. Without serious revision, it could be a bridge to nowhere.
Edwards proposed the new tax as a way to get a quick infusion of cash into the state budget, which is swimming in red ink because of low oil prices, a generally sluggish economy and the failed budget polices of former Gov. Bobby Jindal.
We’ve generally been skeptical of sales taxes because they’re regressive, tending to affect taxpayers who can least afford them. This new proposal lacks the hundreds of exemptions and exclusions under current law, falling heavily on the working families of the state.
It also would, if approved by legislators and signed into law, give Louisiana the highest retail sales tax in the nation.
All of which underscores the importance of making this tax temporary. Ultimately, Louisiana needs a better way to raise revenue. In answer to that reality, Edwards and his legislative allies are labeling the new sales tax an “emergency measure.”
But as the writer Robert Heinlein observed in one of his novels, the most permanent thing in life is a temporary government emergency.
So it is in Baton Rouge: Edwards pushed the state Senate to define “temporary” as five years.
By extending this sales tax for a period past the next state election, Edwards seems to be embracing the same kind of kick-the-can economics for which he rightly took Jindal to task. With such a long sunset for the new tax, there won’t be much urgency, we fear, to tackle real fiscal reform.
The incentive would be removed for the Legislature and the governor to deal with the harder task of rewriting Louisiana’s shambling mess of a tax code. We manifestly need more income tax revenue, for example, to make up for the 2007-08 cuts that put a permanent hole in the state’s budget.
Just as vital are fixes for different corporate taxes and the way that the state subsidizes local governments.
A five-year sales tax relaxes to the point of laxness the drive to tackle real change.
It’s a recipe for failure of one of Edwards’ most important aims — a sustainable state budget that avoids the financial disasters of the type he inherited in January.