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Hawking Louisiana budget reform


State lawmakers will conclude the 2013 annual legislative session this Thursday (June 6). By all accounts, this year's session has been one of the most contentious in memory. After spending months trying to gain support for his controversial tax-swap proposal, Gov. Bobby Jindal abandoned the plan on the opening day of the session. When the initial shock of the governor's decision wore off, lawmakers realized that they — along with voters — had lost their taste for "tax reform" as espoused by the governor.

  At a minimum, the protracted debate over Jindal's idea of swapping much higher sales taxes for no state income tax proved that, while Louisiana's tax code has its share of shortcomings, its income tax is not one of them. Our state's top bracket of 6 percent puts Louisiana squarely in the middle of the 40-plus states that impose an income tax. By contrast, our combined state and local sales tax rate of almost 9 percent ranks third-highest in the country. Jindal's tax-swap plan would have given Louisiana the highest combined state and local sales tax rate in America. The governor was right to drop the whole idea, though he still wants to eliminate Louisiana's income tax.

  As it turns out, events soon proved how wrongheaded the governor is in his determination to eliminate the income tax. After the House passed its version of the state budget for the next fiscal year (which begins July 1), the state Revenue Estimating Conference recognized more than $150 million in additional revenue for next year — most of it from higher-than-expected state income tax collections. Income taxes may not be popular, but Louisiana's is at least efficacious.

  Jindal also was wrong in his decision to punt the whole idea of tax reform to lawmakers. In effect, he walked away when things didn't go his way. He claimed he wasn't pouting, but it sure looked as though he was. Leadership, a topic on which the governor loves to bloviate, requires much more than a "my way or the highway" approach to governance. When one idea goes south, a leader puts forth another — or at least sticks around to help search for another.

  Many observers guessed that lawmakers would waste valuable time trying (in vain) to confect their own tax reform plan and that, at the eleventh hour, Jindal would step in and push his original tax-swap plan anew. Fortunately, House members did not take the bait. In relatively short order, even Jindal's allies pronounced the whole topic of tax reform D.O.A. Instead, House conservatives focused their efforts on the budget. On that front, the House distinguished itself.

  For the first time in decades, House members asserted their independence from the governor on fiscal matters and acted as though the notions of "separation of powers" and "co-equal branches of government" actually mean something in Louisiana. Led by a group known informally as the fiscal hawks (formally organized as the Budget Reform Campaign), the House substantially rewrote Jindal's budget by taking out millions in "one-time" and speculative revenue that Jindal had planned to use to cover ongoing expenses. The folly of Jindal's fiscal policies is evident: Louisiana has seen midyear budget cuts every year that Bobby Jindal has been governor. Those cuts have devastated Louisiana's public colleges and universities. The voters are tired of it and, finally, so are lawmakers.

  As expected, the Senate rewrote the budget bill as well, making it more to the governor's liking. But, as the session entered its final days, it was clear that the governor and his Senate allies would not be able to force the House to accept their version of the budget in the closing hours — as has happened so many times before. Instead, Senate and House leaders searched for common ground on the budget, no doubt sensing that a growing number of House members seem perfectly willing to reject the budget and force a special session.

  In the end, Jindal is likely to get more than he gives on the budget, but it's still noteworthy that the House mustered the chops to call his bluff on the use of one-time money and speculative revenue. The larger goal of the fiscal hawks — true budget reform — remains elusive, however. Several of the hawks' budget reform bills cleared the House by large margins, only to get watered down or killed in the Senate.

  "Sometime it takes a few years to pass good bills," said state Rep. Kirk Talbot, R-River Ridge, one of the hawks. "At least we seem to be moving in the right direction."

  We agree.

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