ARE NEW LOUISIANA TAXES REALLY NECESSARY?

Thursday, January 28^th, 2016

Baton Rouge, Louisiana

ARE NEW LOUISIANA TAXES REALLY NECESSARY?

Paraphrasing but updating former Louisiana Senator Russell Long’s famous saying about how to raise revenue, “We’re going tax you, we’re going tax me, we’ll even tax that guy behind the tree.”  With only a few days in office, Louisiana’s new Governor John Bel Edwards wasted no time in echoing Chicken Little’s admonition that the sky is falling when it comes to having enough revenue for the Bayou State to pay its bills.

So to keep up the current spending level, the new administration set out a whole litany of new tax proposals.  Many of us didn’t even know there were that many taxes on the books that could be raised.  Sales taxes, property taxes, income taxes, utilities taxes, telephone taxes, auto excise taxes, new taxes on tobacco and alcohol, inventory taxes, insurance premium taxes, taxes on out of state Internet purchases; and this is just the list of new taxes on the Average Joe out there.

Most of these taxes are regressive and fall heavily on the ordinary working family.  If this new governor was supposed to be a liberal democrat, you sure couldn’t tell it by his tax proposals.  Remember, this is the candidate who campaigned for governor on the assertion that the current fiscal mess could be addressed without raising any new taxes. While campaigning, the new governor said Louisiana has “a spending problem.”

Taxpayers keep hearing about a $750 million budget shortfall that has to be addressed in the next 5 ½ months, then an additional $1.9 billion hole for the following year.  But here’s the fallacy the governor and legislators want to ignore. These deficits are only incurred if spending continues at current levels.  Does Louisiana really have to spend $750 million beyond it means this fiscal year, and four times that amount next year?  If you don’t have it, maybe you should not spend it.

But oh, the naysayers will say, the Chicken Little scenario will take place with colleges closing and state services grinding to a halt. Really? I served in Louisiana public life for 28 years. As a state senator, I helped draft budgets. As a delegate to the 1973 Constitutional Convention, I helped write (along with future Governor Buddy Roemer) the revenue sections setting out how the state raises tax dollars. As a statewide elected official, I often had to cut my budget to make ends meet. 

Simply put, there are a number of ways to cut the present spending levels in Louisiana government.  Sure, it will take some political courage, for the lobbyists and special interests that live and breathe out of the state capitol will pounce and oppose. Here is a list of items that could and should be reduced or eliminated before the governor and legislators consider more taxes.

Freeze all state travel and purchases for the next 6 months.  No new vehicles, equipment, furniture, etc.  Rescind the $2 million raises handed out by Gov. Jindal to his key staffers in the past few months.  State Treasurer John Kennedy points out that the state has 19,000 consulting contracts at a cost of almost $3 billion.  There is plenty of room here to reduce or eliminate.  Abolish a whole list of special tax credits and tax breaks that many economists say are way too rich with the state getting little in return.  They include solar panels, enterprise zone tax credits, new market tax credits, and motion picture credits that bring in only one dollar in new taxes for every three dollars the state gives away. Review and drastically reduce the hundreds of millions of dollars going to NGOs (non-government contracts to non-profits, many of which are politically connected).

TOPS, the free state tuition grant program, has grown to some $300 million a year, with much of the money going to families with adequate income to pay the cost.  The program needs to be immediately capped and limited to students in actual need.  Corporate welfare?  It would take several columns to list the questionable expenditures being given away.

The bottom line is that Louisiana does no “performance auditing.”  What is the taxpayer getting in return for the billions being doled out by the legislature?  Before there is any effort to raise assessments on a state already heavy in its per capita tax burden, taxpayers need a convincing assessment of how their dollars are being spent and just what services they are receiving in return.  Until then, let’s stop all the “new tax” rhetoric.

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“Just tell 'em you're gonna soak the fat boys and forget the rest of the tax stuff...Willie, make 'em cry, make 'em laugh, make 'em mad, even mad at you. Stir them up and they'll love it and come back for more, but, for heaven's sakes, don't try to improve their minds.”

― Robert Penn Warren, All the King's Men

Peace and Justice

Jim Brown

Jim Brown’s syndicated column appears each week in numerous newspapers throughout the nation and on websites worldwide.  You can read all his past columns and see continuing updates at http://www.jimbrownusa.com.  You can also hear Jim’s nationally syndicated radio show each Sunday morning from 9:00 am till 11:00 am Central Time on the Genesis Radio Network, with a live stream at http://www.jimbrownusa.com.