The blame will all belong to reckless politicians if the money runs out, but regular Joes must pay the price. Newspapers will be grim reading; the wires will hum daily with eyewitness accounts of privation and despair.
Well, maybe the Greeks are worse off. But harrowing times could lie ahead for Louisiana, too. If the Louisiana Chemical Association succeeds with its court challenge to one of the tax increases approved in the last session, the whole house of cards that is the state budget will come tumbling down.
As part of a package of revenue-raising measures adopted by the Legislature to fill the gaping hole in the budget, legislators decided to impose a temporary sales tax on steam, water, electric power and natural gas. If the courts accept the association’s claim that legislators failed to follow proper procedures in doing so, several other tax hikes approved in the last session could be invalidated, too. The votes that authorized them seem more blatantly unconstitutional than this one.
The implications are so dire, with higher education and health care already in parlous shape, that judges may be reluctant to rule against the budget fix that enabled Gov. Bobby Jindal and legislators to preen themselves for averting disaster. But, if the law is strictly applied, disaster looms as large as ever.
The target of the chemical association’s suit is the House concurrent resolution that suspended, until 60 days after the end of the 2016 session, an exemption for steam, water, electric power and natural gas from a portion, amounting to one percent, of sales and use taxes. The resolution passed with a two-thirds vote in the Senate, but garnered only a simple majority in the House.
Although the Legislature does have the authority to suspend a statute by majority vote, here, the association points out, only selected exemptions were temporarily removed, and from just part of the sales tax law, at that. That allegedly amounted to unconstitutional “cherry picking.”
Thus, according to the suit, legislators did not suspend the law, but amended it. Under the constitution, that cannot be accomplished with a resolution. A bill is required.
Furthermore, the constitution says, “The levy of a new tax, an increase in an existing tax, or a repeal of an existing tax exemption shall require the enactment of a law by two-thirds of the elected members of each house of the legislature.” It will take considerable juridical sleight of hand if this resolution, which would boost tax revenues by more than $100 million, is to be upheld.
If it isn’t, and the Louisiana Association of Business and Industry, say, should be in a litigious mood, the floodgates could open, for other measures adopted in the last session would be ripe for constitutional challenge.
Legislative leaders declared that a simple majority sufficed to repeal tax exemptions. With the aid of that somewhat eccentric reading of the state constitution, there was enough support in Baton Rouge to pass $600 million in tax hikes.
Certainly, given that we started the session $1.6 billion in the hole, we would otherwise have been in the worst pickle this side of Athens. But state Treasurer John Kennedy believes several of the bills that raised taxes would never survive a challenge, and his opinion is not to be lightly dismissed. Kennedy, when he is not counting money, teaches constitutional law at LSU.
Meanwhile, the state will likely have to defend another lawsuit, this one from filmmakers furious because, under another bill passed during the last session, they will henceforth get no more than $180 million a year in subsidies from Louisiana taxpayers. Evidently they believe their constitutional rights are infringed by a cap on the amount we pay for the honor of having them shoot their movies here. It has to be for honor, because it certainly makes no business sense to prop up the movie industry. The budget would be in better shape if we bought all the cineastes a ticket out of town.
But the spat over film subsidies is a sideshow. The chemical association makes a persuasive argument in its suit, and, if it turns out to be just the opening salvo, we could be in for a bloody tax war, courtesy of our esteemed government.
James Gill’s email address is email@example.com.