The Louisiana Legislature's logjam over taxes-versus-cuts finally broke this past week, in favor of both. No surprise there. The solution to the state's multi-billion-dollar structural deficit — the legacy of former Gov. Bobby Jindal — was always going to involve compromise.
Democratic Gov. John Bel Edwards and House GOP leaders each conceded just enough to push a temporary one-penny sales tax increase through the Republican-dominated Lower Chamber. The House also passed a slate of GOP-sponsored spending cuts. Those cuts trimmed the current budget much more than the governor wanted, but that’s the nature of compromise.
Meanwhile, Moody’s Investors Service downgraded Louisiana’s bond rating on the same day that the House passed the sales tax. That was awful news, but it underscored Edwards’ and university presidents’ pleas for more revenue.
Edwards said from the get-go that the penny sales tax hike — on top of Louisiana’s existing four-cent sales tax — would be a temporary measure. He initially favored a five-year term, then three years. On Thursday, he agreed to 18 months. The spending cuts and sales tax now go to the Senate, where Edwards holds greater sway.
Both bills (and any others the House may pass) may undergo some revision in the Senate, but the tenuous nature of the House compromise weighs against substantial revision.
The sales tax is the centerpiece of Edwards’ budget fix, but even with the House-passed cuts the state would still be at least $200 million short of covering the $943 million budget gap for the current fiscal year — not to mention the $2 billion-plus gap for the next fiscal year, which begins July 1.
The House declined to take up several other revenue bills at the end of the week, and its fractured membership makes the governor’s task of getting the required two-thirds majority (70 votes) for additional tax hikes a daunting one. The special session must end by March 9, so there’s no time for gridlock.
If gridlock should set in, the whole package of cuts and taxes could end up being rewritten at the eleventh hour by a six-member conference committee. Important bills often wind up in conference, where conferees (three from each chamber) can literally rewrite a bill entirely. When a bill emerges from conference, it goes directly to both chambers for a straight up-or-down vote. No amendments. All or nothing. A final showdown.
As the clock ticks down to the final hours, all eyes will be on Senate President John Alario, R-Westwego, the dean of the Legislature. Alario knows this process better than anyone. He is the master of the conference committee and a deft hand at forging compromise.
As the House anguishes over every detail of every tax measure and every spending bill, Alario sits patiently in the Senate, knowing he may be called upon to sort things out. I can almost hear him whispering to his House counterparts, “Come to Papa.”
That’s a comforting refrain to Edwards and many legislative veterans, but almost as many GOP House members are restive. Time is short — and raising $943 million in three months is a tall order.