Tax Session

Gov. John Bel Edwards answers questions after Louisiana lawmakers ended their third special session of the year with a budget and tax deal, Sunday, June 24, 2018.

They — whoever “they” are — say a good compromise makes nobody happy.

But what does it mean when everybody unhappily involved comes out looking like losers?

That’s what transpired from the culmination of four Louisiana legislative sessions spanning from winter to summer. The fiscal and budget deals ensured that, politically speaking, none of the main players emerged as winners, beginning at the top.

LOSER: Gov. John Bel Edwards. In campaigning for the state’s highest office, the Democrat said he wanted to accomplish structural fiscal reform through lower income tax rates by stripping some tax breaks, to stop endless cycles of crisis in making this permanent, and to engage in “honest” budgeting by not using one-time dollars to pay for recurring expenses.

Three years later, Edwards was stumping for a temporary sales tax hike after failing to persuade legislators to raise income tax rates, yet backed an Earned Income Tax Credit increase. He said he couldn’t accept anything less than a 4.5 percent sales tax or prison doors would fly open and people would go hungry. He ended up approving a 4.45 percent rate and a budget that includes $46.2 million in one-time settlement funds.

Jeff Sadow: Gov. Edwards actions disprove his words on government transparency

As a result, both his campaign promises and credibility lie in tatters.

LOSER: House of Representatives Republican leadership. House Speaker Taylor Barras and other influential GOP powerbrokers like Appropriations Committee Chairman Cameron Henry and Republican Delegation Chairman Lance Harris hoped, if not to prevent sales tax rates rising above 4 percent, to limit reinstitution of the expiring levy significantly below Edwards’ preferred figure. Settling at 4.45 percent made for a miniscule win.

Even worse was their acquiescence to let it linger seven years; it took less time to defeat the Axis Powers than it will to excise this blight. Not keeping any renewal on a short leash only promotes oversized government with no real incentive to cut its fat or to engage in the genuine tax reform that Edwards avoided but used as cover to pursue a tax-and-spend agenda.

Similarly, GOP leaders couldn’t effectively employ the budget as a tool to rein in government. Despite their complaints about the size of government, they assented to appropriate next year about the same amount of state money spent this year, around $14.2 billion — even with convincing evidence, for example, that Medicaid makes hundreds of millions of dollars in improper payments annually and monitors contracting inadequately.

Nice try, but Republicans failed more than they succeeded.

LOSER: The Louisiana Legislative Black Caucus. Even in notching a small victory with the seven-year EITC increase and suspension of some income tax breaks, its members had to swallow what they swore they couldn’t accept until they did: keeping an elevated sales tax rate. And they did so in the oddest way: rejecting lower rates and supporting higher ones, even though they initially had opposed a sales tax hike on the fact that as the higher that rate went, the more it disproportionately hurt low-income households.

What their argument lacked in logic it made up for in silliness, making the group seem unserious.

THE BIGGEST LOSER: The people of Louisiana. Since Edwards took office, the economy has contracted more in Louisiana than in any other state, Louisianans’ personal income gains have lagged most states, and, unlike most states, Louisiana has lost population. During that time, state government squeezed taxpayers for hundreds of millions more dollars annually to inflate state funds spent yearly by a billion dollars, outpacing inflation by 50 percent.

The tax/budget deal reached last month keeps spending and taxes too high. Expect the same dismal economic performance and government bloat to continue.

Jeff Sadow is an associate professor of political science at Louisiana State University-Shreveport. He writes about Louisiana politics at www.between-lines.com, where links to information in this column may be found. When the Legislature is in session, he writes about it at www.laleglog.com. Follow him on Twitter, @jsadowadvocate or email jeffsadowtheadvocate@yahoo.com. His views do not necessarily express those of his employer.