Louisiana has come to a crucial fork in the road. And, contrary to what the renowned wordsmith Yogi Berra recommended, you can’t simply take it.
State leaders must choose which of two paths to follow. One is the familiar route that has taken the state to the bottom or near-bottom of many economic and quality-of-life indicators. The other path can lead to brighter outcomes.
As lawmakers meet in special session, decisions over the next few days regarding tax policy and budgets will determine which path is chosen. Among legislators, a general consensus has arisen that the state needs more revenue. But some important choices loom regarding how high some taxes should be and for how long they should be levied.
The familiar path is paved with the assumption that all will be well if some residents, especially the most productive, pay more taxes — and pay up far into the future. The suggestion that the state's people don't pay enough taxes doesn't square with the findings of the website WalletHub, which computed that Louisianans currently endure the 27th highest tax burden among the states.
If the tax-and-spend culture of the State Capitol prevails, Louisiana would maintain its ranking, already in the upper half among the states, in state dollars spent per capita, adjusted for cost of living. The state spends nearly $200 million on making movies and an untold amount to provide in a needlessly inefficient manner free health care to a tenth of the population, including many who can afford it on their own.
That path, advocated by Democratic Gov. John Bel Edwards and his party, which led to the tax-raising frenzy they backed just prior to and during his time in office, already has taken a toll. Despite the oil price slump ending just after Edwards’ inauguration, during his term Louisiana’s economy not only has performed worse than any other state’s, it actually shrank. From July 2015 to June of last year, some 32,000 more people left Louisiana than moved in, with most of the exodus happening in 2016-17.
And while Edwards might argue that state per capita income grew last year above the national average, he doesn’t mention that much of that came from a whopping 8.3 percent increase in personal income from transfer payments, largely attributable to Medicaid expansion. On average, incomes mostly rose because government, not the economy, gave Louisianans more.
These numbers help explain why the website Wall Street 24/7 deems Louisiana the worst-run state. U.S. News ranks it worst to live in. It's the tax-and-spend philosophy driving there results that Edwards stubbornly wishes to perpetuate.
By contrast, legislative Republicans have supported tax legislation and spending targets to further reduce the size of government. Keeping some portion of the expiring taxes temporarily, mainly on consumption as these taxes harm economic growth the least, and at hundreds of millions of dollars below Edwards’ demands, would recognize the transience of the state’s present fiscal condition. If state government opts not to spend more — or spends less — the economy will grow, making the temporary tax hikes expendable.
Louisiana can live in the past, as Edwards wants, or it can shed those policies that have caused its overwhelming underachievement by choosing responsible spending levels and appropriate taxation to match. In stark relief against its own history, to paraphrase Robert Frost, Louisiana must take the road less traveled — because it will make all the difference.
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 www.between-lines.com. When the Louisiana Legislature is in session, he writes about legislation in it at www.laleglog.com. Follow him on Twitter, @jsadowadvocate or write to firstname.lastname@example.org. His views do not necessarily express those of his employer.