The last time a crisis closed businesses and threw Louisiana residents out of work — as the response to COVID-19 has done — the Louisiana Legislature hopped to and slashed hundreds of millions of dollars in spending to stanch a fast evaporating state treasury.
Their bold move proved largely unnecessary and launched a string of unexpected consequences that eventually changed not only the budget but Louisiana politics.
The twin summer 2005 hurricanes — Katrina and Rita — caused a diaspora of Louisiana residents and closed many businesses. The seven-parish New Orleans area that accounted for about $900 million in state revenues back then was largely empty. Personal income tax collections statewide dropped $474 million to $1.9 billion. Sales tax fell $171 million.
Then-Gov. Kathleen Blanco reasonably ordered a November 2005 special session to rebalance the budget by decreasing appropriations for health care services by $222 million and public universities by $71 million along with another $135 million for other services.
Gov. John Bel Edwards marked the start of the first legislative session of the new term Monday by calling for increased funding for education …
What wasn’t anticipated was how fast people would buy appliances and furniture to get their lives back in order. Actual tax collections were $10.5 billion — about $1.5 billion above expectations.
Reacting to historic surpluses and taxpayers who wanted a break, the 2008 Legislature, now under Gov. Bobby Jindal, rolled back personal income taxes without compensating for those lost revenues. The state soon faced a $1.5 billion shortfall.
Embracing the rhetoric that government is the root of problems, Jindal cut services rather than raise taxes, setting off years of budget problems until Gov. John Bel Edwards took office in 2016, eventually raising taxes, eliminating some tax breaks, cutting some services. He ran for reelection on the surpluses created.
State Sen. Bodi White, the Central Republican who now heads the Senate Finance Committee, was a legislator throughout those years. He said that experience is uppermost on the minds of this year’s krewe of legislators as they begin working the budget.
Budget architects don’t know yet how deep all the restrictions aimed at stopping the spread of the coronavirus will affect the state’s revenues, White said. “But we want to be careful about our next steps.”
Budget considerations aside, the 2005 experience also changed Louisiana politics. The once dominant Democratic Party lost majorities in both chambers, in its congressional delegations, and among agency officials elected statewide.
Republican operative Stuart Stevens predicts this coronavirus event could lead to a similar political realignment on a national level.
“The failures of the government’s response to the coronavirus crisis can be traced directly to some of the toxic fantasies now dear to the Republican Party. Here are a few: Government is bad. Establishment experts are overrated or just plain wrong. Science is suspect. And we can go it alone, the world be damned,” Stevens wrote in an opinion piece published Thursday by The Washington Post.
The president’s initial call to arms on the novel coronavirus was “this is their new hoax,” blaming the Democrats rather than going with a “we will fight them on the beaches” reassurance.
During the past week, however, President Donald Trump, has declared a national emergency and wants to send checks to citizens along with money to help state governments. His poll numbers on his handling of the pandemic shot up 12 points, according to survey released Friday by ABC News/Ipsos.
Still, Stevens, a Jackson, Mississippi, native who cut his teeth in U.S. Sen. Thad Cochran’s campaigns and worked with GOP presidential contenders back to Bob Dole, sees individuals sitting at home “and wondering how long it will be until you can find out if that nasty cold you have is something more.”
In Louisiana, Republican U.S. Rep. Clay Higgins, of Lafayette, gave full voice last week in a video slamming Edwards’ restrictions, such as dining in restaurants, indicating that many Louisiana voters still see government as a problem, said political scientist G. Pearson Cross, of the University of Louisiana at Lafayette.
But Cross is also feeling the start of a shift among hourly workers who supported Trump but now find themselves with fewer resources.
WASHINGTON (AP) — Members of President Donald Trump’s economic team convene Friday on Capitol Hill to launch negotiations with Senate Republic…
“The idea of limited government only really works when the economy is going well,” Pearson said. “It may change the fundamental expectation of what people want and need from government.”
House Appropriations Chair Jerome “Zee” Zeringue, the Houma Republican whose bill outlines proposed government spending for the fiscal year starting July 1, says his colleagues ultimately will decide government’s role. But he has a bottom line far different than the previous House Appropriations Committee.
“It’s incumbent upon government to provide the resources for services and provide the opportunities to stimulate the economy. I expect there are things we can and should be doing that we haven’t been doing,” Zeringue said.