Last Modified: Sunday, February 07, 2016 7:10 AM
The Republican leadership in the state House and Senate isn’t happy about the agenda for the upcoming special session. However, Gov. John Bel Edwards has put enough on their plate for consideration during the short session that begins next Sunday.
Most of the reforms the GOP wants to look at are worthwhile, but there will be more time for that in the regular session beginning March 14. The immediate concern is to come up with $750 million to balance the current year’s state budget. Legislators need to protect higher education and health care from crippling cuts totaling some $260 million with less than five months remaining in the fiscal year.
Tax collections are down for the year and tax breaks and deductions in some cases are costing more than the taxes produce. The Revenue Estimating Conference will report on the financial situation Wednesday, and the deficit is expected to be even higher.
Senate President John Alario, R-Westwego, who has probably served in the Legislature longer than anyone in state history, thinks there is more than enough to consider in the special session.
The items Edwards listed in his call for the session deal with changes in personal income taxes, corporate income and franchise taxes, special service taxes, the state sales tax, tax deductions and suspensions, utility taxes, tobacco and alcohol taxes and Internet taxes.
A bigger problem for legislators down the road is a $1.9 billion deficit predicted for the state budget year beginning July 1. Edwards has to give lawmakers an executive budget for fiscal year 2016-17 by Saturday. He said it would be balanced, which means it will include the major reductions it would take to close that big deficit.
The nonpartisan Public Affairs Research Council of Louisiana produced an excellent road map for dealing with next year’s deficit in a policy brief titled, “A Plan to Control State Spending.” However, it has information that is useful for the current situation.
PAR begins its Jan. 29 report by explaining where the state is today financially and how it got here. Although the state has a $25 billion budget, less than $10 billion of it is state general fund money over which legislators have control. Former governors Kathleen Blanco and Bobby Jindal made tax cuts in 2007 and 2008 that amounted to about $1 billion less in today’s state revenues, PAR said.
The agency said the national recession eventually hit Louisiana and took its toll. Then came tax credit programs that have grown to over $7 billion annually while corporate income taxes and oil and gas revenues were declining.
The overuse of one-time money has been another problem.
PAR said, “In larger amounts each legislative session, Louisiana budget crafters have borrowed and utilized financial resources that were not available to them in subsequent years.”
Although the PAR brief deals primarily with next year’s budget, its fiscal framework for closing the $1.9 billion shortfall includes $700 million in new or increased tax programs. The total is just $50 million short of the deficit legislators have to close in the current year’s budget.
Edwards’ agenda for the special session contains avenues for dealing with dedications and reducing tax credits, sales tax exemptions, subsidies and deductions that can help close the $750 million shortfall. Those changes will also help reduce next year’s budget deficit.
The budget areas that Republicans want to consider do need reform that is long overdue. They want to look at changes in Medicaid, the federal-state health care program for poor and low-income Americans, state pensions, state employee health care, the corrections system and the organization of boards and agencies.
Those are complex issues, and Edwards said he hopes lawmakers won’t need the full 25 days he set up in his special session call. They have finished special sessions earlier in the past.
Alario and Speaker of the House Taylor Barras, R-New Iberia, have said they want to work with Edwards, and Alario has delivered. However, Barras has appointed Republicans to the key money committees that aren’t as accommodating.
Political writers haven’t been kind to those in the GOP who are giving Edwards a hard time.
Robert Mann, a longtime Democrat who writes for The Times-Picayune, said Republicans gave Jindal almost everything he wanted for eight years. He said most legislators knew the governor was “selling them phony numbers,” but they passed his budgets anyway. Now, he said, they don’t want to accommodate a Democratic governor.
Stephanie Grace of The Advocate called the relations between Edwards and a Republican House majority “superficially cordial” and said the governor had hoped to avoid Washington-style politics.
“A month into Edwards’ tenure, though, this much is plain to see,” Grace said. “This is no job for Gov. Nice Guy.”
Louisiana governors are powerful and most have never hesitated to use that power to their advantage.
Grace said, “The thing to watch now is how Edwards chooses to marshal the power he has — and whether this nice guy is also enough of a cold-hearted realist to fully use it.”
I have observed Edwards up close for the last eight years he served in the House. He is a nice guy, but I am convinced he won’t hesitate to get tough. As the Democratic leader for much of that time, he was Jindal’s fiercest critic and a major spokesmen for the people he represented.
The situation shouldn’t come to that because Edwards has reached out to all of his critics, and they should be just as gracious.