by Stephen Waguespack, President and CEO of Louisiana Association of Business and Industry (LABI)
Not sure if you have noticed or not, but there is something called the fiscal cliff looming in Louisiana. If you haven’t heard of it yet, sit tight, because you will hear a whole lot about it over the next few months.
The 2018 crisis will be filled with plenty of drama, finger pointing and inflammatory rhetoric. Every (former, current and future) politician will say it is the other (former, current and future) politician’s fault for the deficits and lack of agreement on the appropriate mixture of taxes and cuts to fill it.
ouisiana has one of the worst insurance regulatory environments in the nation. That is according to Washington-based conservative think tank R Street Institute in its 2017 Insurance Regulation Report Card just issued. And no, it’s not because of the trial lawyers or the big insurance companies. The blame is laid directly on the Louisiana legislature. In ranking states across the country, Louisiana was given an F.
Jim Brown, former State Senator, Louisiana Secretary of State and Insurance Commissioner, knows a little bit about the term, “scrub the budget”. That was the term famously used by former Governor Buddy Roemer, who came from election nowhere in the final weeks of the gubernatorial campaign, to beat then-incumbent Edwin Edwards, Billy Tauzin, Bob Livingston and Speedy Long in 1987.
Today, Louisiana Governor John Bel Edwards released his $25.3 billion “doomsday” Louisiana operating budget outlining the worse case scenario for the upcoming budget year. The budget would devastate health services and sharply cut into the TOPS program. After the budget was released, the Democrats released a statement concerned about what they call $2.4 billion dollars in cuts.
Edwards wants the Republican-controlled legislature to pass a replacement tax package.
The sky is falling, the sky is falling. At least the Louisiana fiscal sky is in a tailspin, or so says Governor John Bel Edwards and a number of legislative leaders. The hue and cry is for one billion dollars in new taxes along with significant fee increases. Even the local papers are chiming in with headlines like “The fiscal threat is real to colleges” and about to “get real.” What a poor taxpayer to think?
In the 2015 gubernatorial campaign, John Bel Edwards pretended he was a conservative Democrat. He emphasized his military background and his support for the pro-life cause and the Second Amendment. Thus, when he was elected, Louisiana supporters expected a somewhat conservative Governor who would steer the state in the right direction. Instead, voters have witnessed a typical “tax and spend” liberal Governor who is a proponent of a large state government and is resistant to tax and fiscal reform.
The war of words over how to deal with a budget deficit or otherwise in Louisiana annual parlance, the fiscal cliff, is mounting as the temporary sales tax comes to an end this week. The sales tax brings roughly one billion dollars into the state coffers.
Today, Louisiana Governor John Bel Edwards has taken to the press pulpit to argue that Republican moderates want a plan presented by their members but the fiscal conservatives refuse to present one, thus, a budgetary showdown that will result in major reductions in government spending.
The incentive package that Louisiana offered to attract a new Toyota/Mazda plant had nothing to do with why the state lost out to Alabama. That Louisiana has an uncompetitive tax code, badly needs tort reform, and has uncertainty surrounding its industrial tax exemption program has everything to do with its jilting.
Hold on to your hernia belts, a potential court decision either could make Louisiana state budgeting more intractable or become a catalyst for badly needed change.
A recent poll by Southern Media and Opinion Research shows that Louisiana Governor John Bel Edwards enjoys a 65% approval rating among voters. Edwards, the only statewide elected Democrat, has seen a surge in his poll numbers since the last legislative session.
Unfortunately for Edwards, there is a legislative session slated to begin in the spring. According to pollster Bernie Pinsonat, the Governor’s “job ratings are apparently affected by legislative sessions with talk of taxes and budget deficits.”