Sales taxes have been a temporary measure to keep the state budget in balance, but that may not be an option any longer.
One of the main reasons, if not THE main reason, state lawmakers have failed to enact fiscal reform is that they approach the topic the way opposing teams approach a football. They have been focused more on scoring political points and winning the battle for headlines than serving the long-term interests of people who elected them.
This is especially true in the hyper-partisan state House of Representatives. For the past few years, House Democrats and Republicans (and I'm laying the blame on both teams here) have shown so little willingness to work together and so little trust in one another that even nonpartisan ideas have difficulty getting through.
One glaring exception was the recent passage of criminal justice reform, which happened only after a major push from business, civic, faith-based and criminal justice leaders — and after significant compromise. Could that bipartisan effort serve as a template for fiscal reform in 2018?
It's possible, but a lot will have to change in the next few months.
Last week we saw a sign — a small sign — that House Democrats and Republicans may at least be ready to start talking to one another. Sixty-five House members gathered in Baton Rouge for a one-day informational "retreat" at which legislative staffers briefed them on the so-called "fiscal cliff" that lawmakers and taxpayers face on July 1, 2018. That's the date that $1.38 billion in "temporary" taxes (mostly sales taxes) enacted in 2016 automatically roll off the books, leaving a gaping hole in the state budget.
Staffers also presented a list of options for covering that hole, and there were no surprises. Every potential solution was considered in recent years, but lawmakers refused to consider anything beyond the temporary, stopgap measure that was sold to taxpayers as a "bridge" to fiscal reform. Trouble is, it's been a bridge to nowhere, and Louisiana is near the end of it.
That's the bad news. The good news is the warring House factions are starting out with exactly the same information — and list of possible solutions — as time begins to run out.
The safe bet, politically, is that lawmakers will continue to do what they've always done: kick the fiscal can down the road by reauthorizing "temporary" measures while promising to seek long-term solutions in the interim.
Even that "safe" play may not work this time, however. "There is absolutely no support on my committee for renewing the sales tax," says state Sen. JP Morrell, a New Orleans Democrat who chairs the Senate Revenue and Fiscal Affairs Committee. Morrell's committee has a Democratic majority, and Dems take a dim view of sales taxes. Without the concurrence of both the House and Senate, no revenue measure — or cost-cutting plan — can be adopted.
House leaders put a more positive spin on last week's meeting, but the real test will come in the next few months as they try to agree on measures to replace the expiring sales tax. Ultimately, House members, senators and Gov. John Bel Edwards will have to cobble together two-thirds majorities in both chambers to enact anything substantial.
That's why last week's meeting was but a small step.