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Clancy DuBos on the Louisiana budget crisis 

Will a $3 billion budget deficit be enough to spur real fiscal reform?

Gov. John Bel Edwards has threatened cuts that could sideline LSU football.

Photo by Shoshanah/ Creative Commons

Gov. John Bel Edwards has threatened cuts that could sideline LSU football.

Necessity may be the mother of invention, but in politics crisis is the mother of reform. It will be interesting to see if a $3 billion budget deficit this year and next is a big enough crisis to spur real fiscal reform in the Bayou State.

  By "real fiscal reform" I mean wholesale changes to the state's tax code as well as its spending paradigm. If the governor and lawmakers don't address both, they'll pay dearly.

  So will Louisiana citizens.

  Gov. John Bel Edwards has proposed some cuts, tapping some one-time money, and a passel of taxes to cover the $940 million current-year deficit and next year's projected $2 billion budget gap.

  The problem with trying to cover a huge budget hole in such a short period of time is the fact that, well, there's such a short period of time. A $940 million budget gap with only three months left in the fiscal year translates into an annual deficit of roughly $3.75 billion. (Anything coming out of the special session likely won't take effect until April 1, and the fiscal year ends June 30.)

  Every independent expert has said Louisiana can't possibly cut that much spending this year, but nobody said you can't scare the crap out of people by threatening to slaughter sacred cows.

  Edwards thus trotted out his version of the bonfire of the vanities last week. He said the current crisis, if not resolved quickly, could force the state to drastically reduce payments to the beloved TOPS college scholarship program and could sideline NCAA athletic teams (including LSU football) next autumn.

  Edwards also harked back to a favorite scare tactic of the other Gov. Edwards (Edwin W.), who pushed a nearly $1 billion tax hike through the Legislature in 1984 by threatening to cut off kidney dialysis machines. The current governor insists he's neither bluffing nor trying to scare folks, just give them a dose of reality.

  For their part, GOP lawmakers want long-term spending reforms. They sent Edwards a letter asking him to broaden his call for the special session to allow consideration of Medicaid reforms, constitutional changes, pension reform and other long-range spending reforms. Edwards balked, setting the stage for some fiscal brinkmanship.

  There's little appetite for major tax hikes in the GOP-dominated and newly independent House of Representatives, where all tax bills must originate (and pass with a two-thirds majority, which is difficult in the best of circumstances). Look for Republicans to try to tie at least some of the governor's tax bills to future spending reforms — which can be considered in the regular legislative session that begins March 14.

  Of course, after bills leave the House they go to the Senate, which historically is more inclined to side with governors. If the House and Senate — and Edwards — can't agree on a solution, we'll see a showdown late in the special session.

  These are scary times for sacred cows. Some may have to be slaughtered before real fiscal reform happens.

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