At the end of the day, lawmakers did little more than kick the can down the road yet again.
Now that Louisiana lawmakers have adjourned for the year, it's a good time to take stock of where we are and where we need to go from here. When Gov. John Bel Edwards took office in January, he learned that former Gov. Bobby Jindal left the state in even worse fiscal shape than anyone imagined — a nearly $1 billion deficit for the just-ended fiscal year and a $2 billion deficit for the current fiscal year. Edwards had little choice but to summon lawmakers into a special session and ask them to raise taxes. The state needed a lot of money, fast.
Most lawmakers took the responsible route, voting to increase taxes and make judicious cuts. However, a group of Republicans, many of whom served under Jindal, chose to turn the state's inherited fiscal crisis into a partisan battle. As a result, the first special session fell far short of the goal of balancing both last year's and this year's budgets. The governor had to convene a second special session. Once again Republican leaders (mostly in the House) sounded a partisan call against him, aided and abetted by business interests whose primary concern was escaping their share of the tax burden.
Here's where Louisiana stands now: Our lawmakers have raised $1.5 billion in mostly temporary taxes to address what Moody's Investors Service calls our "structural deficit" of $2 billion. Another $200 million is expected to be realized in savings as a result of expanding Medicaid — something Jindal refused to do on purely ideological grounds. That's 85 percent of the goal, but $300 million still had to be trimmed from the current year's budget — most notably from TOPS college scholarships, which never before had been cut. On top of that bad news, corporate tax collections were $200 million short in May, which portends another $200 million in cuts this fiscal year. At the end of the day, lawmakers did little more than kick the can down the road yet again.
For years, lawmakers have applied a Band-Aid to Louisiana's fiscal problems, patching gaping holes with temporary fixes. Next year, Edwards and lawmakers have yet another opportunity to enact real fiscal reform. We'd like to suggest a two-pronged approach, one that focuses both on tax reform and spending reform. To do one without the other is useless, yet Edwards seems fixated on the former while his GOP adversaries seem equally enthralled with the latter.
Truth is Louisiana will never implement real fiscal reform unless the governor and lawmakers put partisan differences aside and address both sides of that equation. It's not a question of "liberal" versus "conservative." It's more a matter of "responsible" versus "irresponsible" policymaking.
Yet another blue-ribbon committee is studying Louisiana's tax structure, with the aim of making recommendations in the fall. We suggest the same committee also examine Louisiana's Byzantine budget practices and suggest meaningful long-term reforms. If we don't reform both spending and taxing — now — we'll never break down Louisiana's structural deficit.