When it comes to fiscal reform, voters should be getting sick and tired of seeing lawmakers do nothing — and I do mean nothing — about a serious problem that hasn’t fundamentally changed in a decade.
In 2002, at the urging of Republican Gov. Mike Foster, voters approved the Stelly Plan, which lowered sales taxes and increased state income taxes. Note that voters approved that plan. And it worked. Louisiana got a tax base that grew as incomes rose.
In 2007 and 2008, Govs. Kathleen Blanco and Bobby Jindal signed legislation effectively gutting the Stelly Plan. Since then, Louisiana has fallen farther and farther behind other southern states in economic development and prosperity, educational funding and attainment, and just about every other “good” list you can imagine.
Meanwhile, lawmakers talk about fiscal reform but do nothing about it.
Genuine fiscal reform, like a coin, has two sides — one side is tax reform and the other is spending reform. Legislative Republicans and Democrats look at opposing sides of that coin, with Gov. John Bel Edwards siding with the Dems. The GOP focuses on spending cuts; the Dems and Edwards focus on tax hikes.
Both sides are equally right and wrong, because neither takes a holistic approach. They just keep talking past each other — and blaming each other.
Two years ago, facing the most recent fiscal “cliff,” lawmakers passed a “temporary” two-year sales tax increase, giving Louisiana the highest combined state and local sales tax in the country. The idea was to use the two-year “bridge” to confect a long-term solution, which of course didn’t happen.
The sales tax hike and other “temporary” fixes are set to expire June 30, leaving a hole of at least $1 billion in next year’s operating budget. Our state constitution prohibits raising taxes in an even-numbered year. Because lawmakers refused even to consider meaningful fiscal reform last year, a special session will be required this year if public hospitals and universities are to avoid being tossed over the next cliff. (Yeah, “cliff” is a tired metaphor, but no one’s more tired of it than students and people who depend on public hospitals — to them, it’s very real.)
As the next cliff approaches, both sides are playing a game of political chicken. The governor has proposed a tax plan resembling that of a special task force he and lawmakers created two years ago. It raises income taxes and lowers sales taxes. Sound familiar?
Edwards says he won’t call a special session unless House GOP leaders back his plan or propose one of their own to cover the budget hole. The House Republicans don’t like Edwards’ plan but so far offer no alternative. Edwards is poised to submit a doomsday budget and dare lawmakers to pass it. They might, but more likely they’ll pass another version (or extension) of “temporary” taxes, setting the stage for yet another “cliff” two years hence.
Meanwhile, Louisiana will slip even farther behind other southern states.
Are you tired of this yet, folks? If so, remember this feeling when you vote next year.