Thursday, 14 June 2018 16:18

Pelican Institute: Louisiana's economy last, say no to tax increases

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by Daniel Erspamer, CEO Pelican Institute for Public Policy

The second special session of 2018 has come and gone, although it didn’t go quietly. The theatrics in the last hour of debate rivaled some of Hollywood’s greatest performances. But still, the dramatics were not worth the waste of time and, more importantly, not worth Louisiana taxpayers’ hard-earned money. 

Here's the latest from Baton Rouge: Governor Edwards has now called a third special session – the seventh since he took office in January 2016 – to convene on June 18. The session can last no longer than 10 days as the legislature is required to adjourn no later than 6:00 pm on June 27. Keep in mind that each day lawmakers are convened in a special session, Louisiana taxpayers are footing the steep bill of $60,000 per day.

 
So, what’s the hold up? Why can’t lawmakers in Baton Rouge agree? The Governor’s camp believes an increase in taxes is the answer to closing the gap between proposed spending and projected revenue. Free-market advocates, on the other hand, believe streamlining and prioritizing government spending is the most productive way to make ends meet. So far, no tax proposal has received enough votes to pass the legislature.
 
Tax-raising scenarios proposed and considered over the last several months would result in JOB LOSS and a DECLINE in the state’s gross domestic product (GDP) at a time when we can least afford it. Over the last year, the state’s GDP dropped by 0.2% - the second straight year in decline - making Louisiana the WORST economy in the nation, according to the federal Bureau of Economic Analysis. In other words, we’ve hit rock bottom. We simply cannot afford to dig ourselves into a deeper hole by embracing these tax proposals. Here are the facts:
 
  • Raising the state sales tax by 0.25% would, within a year, lead to the net loss of 1,400 jobs and decrease the state’s GDP by $86 million, while raising $164 million in new tax revenue.
 
  • Increasing the state sales tax by 0.5% would, within a year, lead to the net loss of 2,800 jobs and decrease the state’s GDP by $173 million, while raising $329 million in new tax revenue.
 
Bottom line: it does not make economic sense for lawmakers to pass higher tax proposals that would hurt Louisiana’s taxpayers, job seekers, and working families who are already feeling the pinch of trying to make ends meet.
 
To create a long-term, sustainable and prosperous economy that grows jobs and creates opportunities for everyone in Louisiana, our elected officials must stop turning to the taxpayer each time lawmakers want to spend more than projected tax revenues will support. Now is the time for lawmakers to own the responsibility of allowing spending to get out-of-control by streamlining and prioritizing spending. Lawmakers over the years have developed a bad habit of spending more money than the state has and sending taxpayers the bill for it. Clearly, this approach isn’t working.
 
Legislators today face a clear choice: do they continue to embrace the status quo of more spending and higher taxes, or do they draw a line in the sand and forge a new, more prosperous path for Louisiana? Eighteen years into a new century, Louisiana leaders still run our state on a system from a bygone era. It’s time for a new vision to bring jobs and opportunity back to our state and create a brighter future for all Louisianans, not just a select few.
 
For more information on the proposed tax hikes or how to get involved, click the link below, look on our website, or join our community on social media by liking the Pelican Institute onFacebook and following us on Twitter. Together, we can turn the state around and bring jobs and opportunity back to Louisiana.
 
Yours in Liberty,
 
Daniel Erspamer, CEO
Pelican Institute for Public Policy
 

 

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