State lawmakers and Gov. John Bel Edwards were on the cusp of striking a deal Tuesday to shore up the current fiscal year budget by pulling some $90 million from the state’s Rainy Day Fund and by imposing cuts in spending that will still leave a budget in place that’s larger than the one lawmakers approved in Gov. Bobby Jindal’s last year in office.
At least that’s where everything was headed Tuesday morning as the special legislative session to deal with the budget shortfall headed toward a close. The session, which got underway on Feb. 13, could last no longer than Wednesday evening.
Though it appeared lawmakers and the governor had reached an agreement to erase a $300-million deficit, there was still the possibility the special session would implode. Conservatives in the House of Representatives, who previously insisted on balancing the budget by cuts in spending alone, wanted concessions in order to go along with tapping the Rainy Day Fund to bring the budget back in line.
Conservatives particularly demanded that all statutorily dedicated funds pay their proportionate share of the state’s bonded indebtedness. It’s a somewhat complicated topic, but it’s an issue that’s near and dear to conservatives in the House who desire to draw a line on excessive spending. As expected, Edwards didn’t like it and once labeled it illegal.
His tune changed a bit when it appeared the special session could blow up in his face if he didn’t give a little to get the House to play ball.
While it’s no laughing matter that the governor called the Legislature into a special session to deal with a budget that was out whack, let’s face it. Erasing a $300-million deficit — under somewhat normal circumstances — is not that big of a deal. It’s simply not a lot of money in light of the size of the state budget.
Yet, we have divided government in Louisiana, meaning our governor is a tried-and-true Democrat while the Legislature is controlled by Republicans including a coalition of Republicans in the House who genuinely believe state government does too much for too many people.
Edwards is a smart man. He’s politically astute, too, but his politics haven’t evolved to give us any reason to believe he can put together a coalition to win re-election in two years. Until now, Edwards has relied on the Black Caucus, white Democrats and a conciliatory Senate to advance at least part of his agenda. That’ll work for a spell in the Legislature, but it won’t translate into an electoral majority on election day in 2019, especially since it’s highly unlikely Edwards will face a candidate like David Vitter again.
Bluntly put, Edwards must expand his base beyond blacks, traditional Democrats and a Senate that wishes to go along and get along if he’s to serve a second term. But there’s an avenue for him to get there.
With the regular legislative session just on the horizon, word began to leak weeks ago that our friends at the Louisiana Association of Business & Industry as well as their cohorts at the Louisiana Chemical Association would make a move to claw back at least some of the tax credits and other goodies that lawmakers took away from Big Business during the tax-raising special sessions last year. To offset the loss in revenue for the state, LABI and the chemical association — working in conjunction with some Republicans particularly in the House — advocate expanding the state sales tax. In other words, they want to tax “services.” Legal fees come to mind. Accounting fees come to mind, too. Put it this way, any “service” a consumer could possibly need in a free-market economy would be subjected to the state sales tax if Big Business — namely LABI and the chemical association — get what they want.
In Louisiana, there are more than 200 corporations that pay zero tax to the state. In some instances, corporations actually get money from the state for simply operating in Louisiana and for employing Louisianians. Meanwhile, some 60 percent of the state’s general fund budget is financed by sales taxes paid by Louisiana consumers and by state income taxes paid by Louisianians who earn a living.
Does that seem fair to you?
As a small business owner who buys goods and services and who pays state income taxes, it doesn’t seem too damn fair to me.
Therein lies an avenue for Edwards to put himself in a very good position to earn a second term. All he needs is the political will to force the Legislature to face reality and start taxing those 200-plus corporations while giving us commoners a little help where we need it — in the pocket book under guise of a tax cut or two.
Edwards would make a few enemies by shifting the tax burden a bit, but he would endear himself to hundreds of thousands of Louisianians who drag their fannies out of bed every morning to go to work.
Sam Hanna Jr. can be reached by phone at 318-805-8158 or e-mail at email@example.com.