At the crossroads in Baton Rouge

Last Thursday Governor Edwards spoke to the public about the financial crisis destroying Louisiana. During his speech he asked our legislators to put aside party ideological differences and come together to produce sensible constructive solutions to solve the short-term and long-term budgetary problems our state faces.   This would be an easy task if we had a machine that could erase everyone’s memory about the events of the last eight years, but sadly none exists.

However, early indicators suggest that the coming together may be more difficult than one would suppose.  First, there was the rejection of Edward’s selection for Speaker of the House. 

Second, after the governor concluded his state of the state speech, John Kennedy, State Treasurer, had been anointed by his cohorts with the honor of presenting the official rebuttal speech.  During Jindal’s reign, our legislators considered Kennedy a malcontent and ignored his suggestions; 400 according to Kennedy’s latest count.  If they truly felt he had viable solutions it seems reasonable to assume they would have implemented some during the last eight years.  Now they are portraying him as a fiscal expert, and want Governor Edwards to pay him allegiance.

Next there is the problem that many of the powerful leaders in the legislature signed the same Norquist anti-tax pledge that Jindal did.  Allegiance to this pledge resulted in their blocking of several revenue raising bills and created such voodoo legislation as the SAVE Offset Bill, which imposed a phantom fee on college students which they never had to pay.

Finally, there are our legislators’ past refusals to deal with the problem of the tax credits and entity rebates that exist in this state.  According to a recent state auditor’s report in 2012 there existed over 85 tax credits.  These tax credits can be claimed on individual income, corporation income, or corporation franchise tax returns. Of the 85 tax credits, eight (9%) have a rebate component. These credits and rebates are authorized by state law.  Many are not new, they have existed for years.  Forty-four (52%) of Louisiana’s 85 tax credits each resulted in at least $1 million or more in revenue loss to the state for at least one year during calendar years 2006 through 2011. Six (14%) of the 44 tax credits also have a rebate component that resulted in additional revenue loss.

Our legislators are well aware of these findings and even went so far as establishing a legislative committee to study these tax credit give-a-ways.  However, that committee’s’ only recommendation was that further study was necessary.  They have never taken the initiative to rein in some of these deficit-creating programs because of strong opposition from special interest lobby groups, like the LABI, which contribute heavily to their campaign funds. 

Can Governor Edwards get his wish of coming together?  The jury is still out on this one and early signs don’t look promising.  I hope I am wrong.  But there is something our legislators could do. There are two reports with which they need to be thoroughly familiar.  On is entitled Louisiana Tax Study, 2015, which was prepared by Dr. Jim Richardson, LSU, and Drs. Steven Sheffrin, and James Alm, Tulane University.  The other is The Tax Foundation’s Louisiana Fiscal Reform A Framework for the Future, by Liz Malm, Economist, Scott Drenkard, Director of State Projects, Jared Walczak, Policy Analyst, and Joseph Henchman, Vice President, Legal & State Projects.

The first study was actually commissioned by the legislature.  I wonder how many have read it?  These two documents can allow our legislators to rise above their political biases and guide them in truly solving the financial crisis we face.  Will they choose to put the state above party politics? Let’s hope so.  If not, we will see a replication the inaction that’s now crippling our federal government and continue the spiral of worsening the quality of life for Louisiana residents.