One pretty much knew the outcome of the special election for the Sixth Congressional District in Louisiana was going to be unpredictable. Even more fascinating is that even though it’s over, it’s not really over.
You knew things were getting interesting because it was a special election which tends to bring out an unrepresentative electorate compared to what will come in November with a presidential contest topping the ballot. You also had an independent candidate whose impact in terms of voter diversion from the major party nominees was unknown. You had the Democrat nominee runner-up telling black voters not to vote for the Democrat nominee and that he would run again, basically already campaigning before this one was even decided.
In the end, however, independent Ashley Casey’s campaign really did not change the overall results, where state Rep. Don Cazayoux narrowly upset former state Rep. Louis “Woody” Jenkins. His erstwhile primary opponent state Rep. Michael Jackson’s ads seem to have been countered somewhat by former U.S. Rep. Cleo Fields’ endorsement at the last minute. Jackson and Fields have been allies in the past, and these apparently contradictory moves were entirely by design.
From black politicians’ standpoint, Cazayoux will be easier to knock off than Jenkins would have been in the fall. Jackson plans to run again but as an independent and to make that work he has to have a white Democrat to siphon off enough white votes in a three-contest to win. Had Cazayoux lost, he well may not have tried it again because in November in this district that election will better favor a Republican or a black Democrat.
One reason why is personalistic factors in an isolated contest such as this one featured will play a smaller role with a presidential candidate at the top of a ticket. Jenkins historically has been a divisive politician and his campaign got too fixated on arcane minutiae such as Cazayoux would be taking orders from Democrat House Speaker Nancy Pelosi instead of pounding home his liberal voting record in the state House. Meanwhile, Cazayoux leveled personal attacks on Jenkins. Issues will be more important in November especially with a liberal Democrat to tie Cazayoux around.
Another factor will make that easier, although it won’t be pursued by Jackson, and that will be especially true if Sen. Barack Obama is the nominee as seems likely. That works against Cazayoux in two ways: when not blasting Jenkins, Cazayoux trumpeted some socially conservatives preference of his to obscure his overall political liberalism but being tied to Obama’s social liberalism will negate that, and that Obama’s presence on the Democrat ticket will dissuade white for voting for Cazayoux and encourage blacks to vote for Jackson if he runs.
Finally, with this being a vulnerable seat for Democrats and having to defend Sen. Mary Landrieu’s vulnerable seat, plus with better chances elsewhere in the country and a sputtering Obama to support, national Democrats will not put much money into this contest, unlike this time when there was no other contest to support. Meanwhile, this one will be a priority for the GOP and other unaffiliated supporters.
Thus, Jackson’s plans are best served with a white Democrat in office. His chances especially improve if a quality Republican doesn’t step up soon to run with qualifying beginning in just a couple of months – the compressed schedule being something else working against Cazayoux.
Normally, being in office would give a bump to an incumbent, but Cazayoux barely will have any time in office at all – in fact, probably only enough time to make votes that could hurt rather than help himself. He must immediately gear up for reelection bid that, quite frankly, shows a major portion of his victory came courtesy of black votes the majority of which will disappear if Jackson runs. Even if Jackson doesn’t, an Obama candidacy will probably drive more whites who had voted for him this time into a Republican’s camp than add blacks to his column.
Winning today was nice for Cazayoux, but in reality he has six more months of campaigning ahead and with this win is hardly any closer to winning then. And if Jackson does get into the race, Cazayoux’s Congressional career almost certainly will be among the shortest on record as he has little chance to beat both a Republican and Jackson.
Jeffrey D. Sadow is an associate professor of political science at Louisiana State University Shreveport. If you're an elected official, political operative or anyone else upset at his views, don't go bothering LSUS or LSU System officials about that because these are his own views solely. This publishes five days weekly with the exception of 7 holidays. Also check out his Louisiana Legislature Log especially during legislative sessions (in "Louisiana Politics Blog Roll" below).
1.5.08
Butchering of tax cut issue raises doubts about Jindal
Evidence continues to mount that Gov. Bobby Jindal simply does not want an individual income tax cut this year. If this is the case, his administration is handling it completely the wrong way and threatens to terminate any effectiveness of his governorship.
The crux is SB 87 by state Sen. Buddy Shaw which originally was to reduce income taxes for the middle- and highest-level filers in the state, reversing bracket hikes of fives years ago. But it got amended, mostly by those with the intent to stop it one way or the other, to get rid of all income taxes gradually over 10 years. That may be an achievable goal, but so much can happen between now and then that the idea of eliminating individual income taxes – a goal that Jindal himself during last year’s campaign said he hoped, but did not promise, he could achieve before he left the governor’s mansion – could be executed in a better fashion than the current construction of SB 87.
But the most surprising aspect of the whole matter has been an apparent great reluctance for Jindal to go along with its original intent. Jindal never did promise to cut income taxes in any way despite his feeling it was a goal to shoot for, and the Jindal Administration, with widespread acknowledgment from legislators, has warned rightly that budget deficits loom which may argue for getting those under control through spending changes first, then followed by individual tax cuts – even as Jindal already has gotten onto the books business tax cuts.
Still, there is spending in Jindal’s budget that easily could be sacrificed, such as $307.1 million for an economic development “megafund” that could attract large employers to the state – or maybe not at all – to offset the anticipated initial revenues losses from the tax reduction. Further, in about a week the state’s body charged with providing the official amount of revenue available for state spending almost certainly will declare hundreds of millions more dollars available. Even a House committee is looking for other ways to trim the budget. By the numbers, the original SB 87 seems “affordable.”
Jindal initially said, after totally resisting the plan, that if there were offsets elsewhere, he would sign onto it. Well, the House in particular has indicated there will be offsets. But it appears that even so, Jindal operatives have done everything possible to kill any form of SB 87. Observers (and anonymous commenters in this space) assert they perceive the first priority of the Administration has been to stop the original SB 87, then if failing to amend it to stop it and resist any attempts to strip it of the poisonous amendments to save it even if it means having to cast a veto on the amended version, and that the last option seems to be actually signing into law the original bill.
If Jindal truly were in favor of it, as soon as it got out of Senate committee he would have gotten in front of the entire issue, saying he would work with legislators to trim other spending, or perhaps call on them to wait until new revenue estimates got declared. Instead, publicly he issued a lukewarm endorsement and allowed these shenanigans to happen in the Senate. (Perhaps as telling was as soon as the initial poison-pill amendment got tacked onto to the bill by a single vote, Sen. Pres. Joel Chaisson popped open his cellphone and began talking.)
And if Jindal really is against the original bill, why doesn’t he just come out and say it? Why doesn’t he argue that looming budget deficits make this an unwise move this year? Why doesn’t he make the case that even extra excess revenues coming in for this year still are too shaky of a ground at this time on which to bring about a tax cut? Why wouldn’t he even say he would wants to wait a year to see how finances develop and if things look good enough, he will find a way to produce a cut next year?
These arguments won’t please some, but they would demonstrate Jindal is a responsible steward who ultimately believes in individual tax cuts as a moral imperative and an economic development tool. Instead, the impression he is giving through this episode is that he has led many to believe he is one thing but by his actions apparently he is a fraud. Either he must explain why an income tax cut would be so monumentally irresponsible at this time, despite his presumed belief that they assist in making government smaller and increasing individual autonomy, or else his actions indicate he never has believed in these things in the first place – whether that genuinely describes his attitude.
That being the case, now his political position is such that to change this growing impression he must head this off now by giving unqualified support for the original SB 87, telling legislators to give him a clean bill and he signs it, or make the case that, given present finances, it is irresponsible. Giving grudging lip service yet apparently working behind the scenes to defeat it is something we would expect of the past tax-and-spend governors of Louisiana, not what many thought they were getting when they voted for Jindal. And without that support, a promising gubernatorial reign is critically wounded.
Simply, had the Jindal Administration willingly wanted to squander political capital, it could not have picked a more effective way to do it as events now unfold.
The crux is SB 87 by state Sen. Buddy Shaw which originally was to reduce income taxes for the middle- and highest-level filers in the state, reversing bracket hikes of fives years ago. But it got amended, mostly by those with the intent to stop it one way or the other, to get rid of all income taxes gradually over 10 years. That may be an achievable goal, but so much can happen between now and then that the idea of eliminating individual income taxes – a goal that Jindal himself during last year’s campaign said he hoped, but did not promise, he could achieve before he left the governor’s mansion – could be executed in a better fashion than the current construction of SB 87.
But the most surprising aspect of the whole matter has been an apparent great reluctance for Jindal to go along with its original intent. Jindal never did promise to cut income taxes in any way despite his feeling it was a goal to shoot for, and the Jindal Administration, with widespread acknowledgment from legislators, has warned rightly that budget deficits loom which may argue for getting those under control through spending changes first, then followed by individual tax cuts – even as Jindal already has gotten onto the books business tax cuts.
Still, there is spending in Jindal’s budget that easily could be sacrificed, such as $307.1 million for an economic development “megafund” that could attract large employers to the state – or maybe not at all – to offset the anticipated initial revenues losses from the tax reduction. Further, in about a week the state’s body charged with providing the official amount of revenue available for state spending almost certainly will declare hundreds of millions more dollars available. Even a House committee is looking for other ways to trim the budget. By the numbers, the original SB 87 seems “affordable.”
Jindal initially said, after totally resisting the plan, that if there were offsets elsewhere, he would sign onto it. Well, the House in particular has indicated there will be offsets. But it appears that even so, Jindal operatives have done everything possible to kill any form of SB 87. Observers (and anonymous commenters in this space) assert they perceive the first priority of the Administration has been to stop the original SB 87, then if failing to amend it to stop it and resist any attempts to strip it of the poisonous amendments to save it even if it means having to cast a veto on the amended version, and that the last option seems to be actually signing into law the original bill.
If Jindal truly were in favor of it, as soon as it got out of Senate committee he would have gotten in front of the entire issue, saying he would work with legislators to trim other spending, or perhaps call on them to wait until new revenue estimates got declared. Instead, publicly he issued a lukewarm endorsement and allowed these shenanigans to happen in the Senate. (Perhaps as telling was as soon as the initial poison-pill amendment got tacked onto to the bill by a single vote, Sen. Pres. Joel Chaisson popped open his cellphone and began talking.)
And if Jindal really is against the original bill, why doesn’t he just come out and say it? Why doesn’t he argue that looming budget deficits make this an unwise move this year? Why doesn’t he make the case that even extra excess revenues coming in for this year still are too shaky of a ground at this time on which to bring about a tax cut? Why wouldn’t he even say he would wants to wait a year to see how finances develop and if things look good enough, he will find a way to produce a cut next year?
These arguments won’t please some, but they would demonstrate Jindal is a responsible steward who ultimately believes in individual tax cuts as a moral imperative and an economic development tool. Instead, the impression he is giving through this episode is that he has led many to believe he is one thing but by his actions apparently he is a fraud. Either he must explain why an income tax cut would be so monumentally irresponsible at this time, despite his presumed belief that they assist in making government smaller and increasing individual autonomy, or else his actions indicate he never has believed in these things in the first place – whether that genuinely describes his attitude.
That being the case, now his political position is such that to change this growing impression he must head this off now by giving unqualified support for the original SB 87, telling legislators to give him a clean bill and he signs it, or make the case that, given present finances, it is irresponsible. Giving grudging lip service yet apparently working behind the scenes to defeat it is something we would expect of the past tax-and-spend governors of Louisiana, not what many thought they were getting when they voted for Jindal. And without that support, a promising gubernatorial reign is critically wounded.
Simply, had the Jindal Administration willingly wanted to squander political capital, it could not have picked a more effective way to do it as events now unfold.
30.4.08
Chickens coming home to roost on Democrat plantation
It’s good to see Louisiana’s media finally coming to understand something that has been reiterated in this space ever since the summer of 2006 – that the switch from blanket to closed primaries for federal contests in Louisiana ended the Democrat Party as we know it in the state, hastening its move into minority status. And it happened because a good portion of its members wanted it to work this way.
Republicans, of course, prefer their move into majority status, but two years ago they were outnumbered in the Legislature and did not control the Governor’s Mansion. In order to pass the legislation that would change primaries from a contest where all ran together regardless of partisan identification with the top two finishers squaring off again if none got an absolute majority, to having separate party primaries where nominees must win with a majority utilizing a runoff if necessary but then who meet against all candidates in a general election where plurality wins, they needed allies. They got them – black Democrat lawmakers.
Understand that until now in Louisiana, the last vestige of slavery has been among the Democrats. White politicians have acted as the masters because they could win general elections. This was because they could better position themselves as “moderates” even though many white candidates are almost if not as liberal as black candidates. Both the state and national levels of the part have recognized this for decades and therefore typically support only white candidates regardless of primary selection method. Thus, black Democrats for national elections by the party are treated as slaves – their only use is to dredge votes for white candidates and then the white Democrat winners, fearful of alienating more conservative white voters who might defect to future GOP candidates while taking for granted black voters would stay on the plantation regardless, would fail to support policy preferences of black leaders who manipulated much of the black vote.
But this dynamic could hold only so long as an escape route off the plantation was not offered to black leaders. The closed primary presented itself as this chance, in two ways. First, if the state Republicans would close their primaries totally – meaning independents could not participate in them – this would encourage conservative whites who had registered previously as Democrats to switch, draining this pool of support for white Democrat candidates in a closed primary, even if Democrats continued to allow independents to participate. (If the GOP followed that option too, they may hope to convert those independents, but then voters could register as independents and jump back and forth, largely recreating the dynamic under the blanket system.)
The GOP cooperated on this account by completely closing their primaries. Over time, perhaps in the next couple of years, as whites file out of the Democrats while blacks stay with the party for the most part, blacks will become the plurality if not majority in certain important constituencies. For example, at the beginning of the year, white Democrats outnumbered blacks by about 4,000 in the 6th Congressional District. In the next three months, spanning three instances of closed primary elections, whites lost about 1,000 registrants, blacks gained about 3,000 and, for the first time in history, black Democrats now outnumber whites (by nine).
This does not lead black politicians to primary wins, however, not yet. So the second, interim strategy for blacks to exit white Democrat servitude is to take advantage of the plurality-win standard. In some jurisdictions, demographics were such that under the blanket primary system the primary would produce a black Democrat as the top vote-getter – only to then have that candidate lose to a white Democrat or Republican in the general election runoff. But there is no runoff under these new rules, meaning blacks now can win in places where only white Democrats could previously.
In fact, in most jurisdictions like this, it will be Republicans rather than black Democrats who can win. However, that is not the central issue for black Democrat leaders. Their goal is not to increase the total number of Democrats elected, but to increase the number of black Democrats being elected – even if it means blacks running as independents in the general election until their voters control the party. So, note the community of interests between Republicans and black Democrats in establishing the closed primary: Republicans will have better chances to win more Congressional seats, blacks will have better chances to win more such seats, and white Democrats chances will be far less.
The transformation that has occurred courtesy of the closed primary for federal elections because it enabled the divide in the community of interests between white and black Democrats to favor the latter’s interests more by departing rather than by staying. In promoting their interests, as long as black Democrats under the blanket primary had the least electoral power of the three main entities in state politics (themselves, white Democrats, and Republicans), their best choice to get as much of their agenda as they could was sticking with white Democrat candidates. But now with this escape route provided by the closed primary, they don’t need to support white Democrat candidates to increase the chances of their agenda’s adoption, with the paramount concern of that agenda being to elect black candidates because supposedly they better represent presumed black interests.
Thus, when black and Republican lawmakers in the Legislature united in 2006 to pass the legislation enabling closed federal primaries, white Democrats could stop them only in one way – by having white Democrat former Gov. Kathleen Blanco veto the bill. But she didn’t, likely for two reasons: the sum of Republican and black Democrat legislators were close to veto-proof majorities in each chamber, and because there was some sentiment among even white Democrats to go in this direction because the courts were requiring later general election runoffs for Louisiana contests because of the blanket primary, meaning loss of seniority and other perquisites for Louisianans in Congress.
Regardless, the state’s Democrat Party forever is altered for national contests. Expect that within a few years, also as a consequence of redistricting, the only members of the U.S. House will be Republicans and black Democrats, and just one of the latter at a time. It also is logical that when Sen. Mary Landrieu leaves office, perhaps as early as the beginning of next year, few if any white Democrats will find their way to the U.S. Senate for the foreseeable future. These are the consequences of the chickens coming home to roost on the Louisiana Democrat plantation.
Republicans, of course, prefer their move into majority status, but two years ago they were outnumbered in the Legislature and did not control the Governor’s Mansion. In order to pass the legislation that would change primaries from a contest where all ran together regardless of partisan identification with the top two finishers squaring off again if none got an absolute majority, to having separate party primaries where nominees must win with a majority utilizing a runoff if necessary but then who meet against all candidates in a general election where plurality wins, they needed allies. They got them – black Democrat lawmakers.
Understand that until now in Louisiana, the last vestige of slavery has been among the Democrats. White politicians have acted as the masters because they could win general elections. This was because they could better position themselves as “moderates” even though many white candidates are almost if not as liberal as black candidates. Both the state and national levels of the part have recognized this for decades and therefore typically support only white candidates regardless of primary selection method. Thus, black Democrats for national elections by the party are treated as slaves – their only use is to dredge votes for white candidates and then the white Democrat winners, fearful of alienating more conservative white voters who might defect to future GOP candidates while taking for granted black voters would stay on the plantation regardless, would fail to support policy preferences of black leaders who manipulated much of the black vote.
But this dynamic could hold only so long as an escape route off the plantation was not offered to black leaders. The closed primary presented itself as this chance, in two ways. First, if the state Republicans would close their primaries totally – meaning independents could not participate in them – this would encourage conservative whites who had registered previously as Democrats to switch, draining this pool of support for white Democrat candidates in a closed primary, even if Democrats continued to allow independents to participate. (If the GOP followed that option too, they may hope to convert those independents, but then voters could register as independents and jump back and forth, largely recreating the dynamic under the blanket system.)
The GOP cooperated on this account by completely closing their primaries. Over time, perhaps in the next couple of years, as whites file out of the Democrats while blacks stay with the party for the most part, blacks will become the plurality if not majority in certain important constituencies. For example, at the beginning of the year, white Democrats outnumbered blacks by about 4,000 in the 6th Congressional District. In the next three months, spanning three instances of closed primary elections, whites lost about 1,000 registrants, blacks gained about 3,000 and, for the first time in history, black Democrats now outnumber whites (by nine).
This does not lead black politicians to primary wins, however, not yet. So the second, interim strategy for blacks to exit white Democrat servitude is to take advantage of the plurality-win standard. In some jurisdictions, demographics were such that under the blanket primary system the primary would produce a black Democrat as the top vote-getter – only to then have that candidate lose to a white Democrat or Republican in the general election runoff. But there is no runoff under these new rules, meaning blacks now can win in places where only white Democrats could previously.
In fact, in most jurisdictions like this, it will be Republicans rather than black Democrats who can win. However, that is not the central issue for black Democrat leaders. Their goal is not to increase the total number of Democrats elected, but to increase the number of black Democrats being elected – even if it means blacks running as independents in the general election until their voters control the party. So, note the community of interests between Republicans and black Democrats in establishing the closed primary: Republicans will have better chances to win more Congressional seats, blacks will have better chances to win more such seats, and white Democrats chances will be far less.
The transformation that has occurred courtesy of the closed primary for federal elections because it enabled the divide in the community of interests between white and black Democrats to favor the latter’s interests more by departing rather than by staying. In promoting their interests, as long as black Democrats under the blanket primary had the least electoral power of the three main entities in state politics (themselves, white Democrats, and Republicans), their best choice to get as much of their agenda as they could was sticking with white Democrat candidates. But now with this escape route provided by the closed primary, they don’t need to support white Democrat candidates to increase the chances of their agenda’s adoption, with the paramount concern of that agenda being to elect black candidates because supposedly they better represent presumed black interests.
Thus, when black and Republican lawmakers in the Legislature united in 2006 to pass the legislation enabling closed federal primaries, white Democrats could stop them only in one way – by having white Democrat former Gov. Kathleen Blanco veto the bill. But she didn’t, likely for two reasons: the sum of Republican and black Democrat legislators were close to veto-proof majorities in each chamber, and because there was some sentiment among even white Democrats to go in this direction because the courts were requiring later general election runoffs for Louisiana contests because of the blanket primary, meaning loss of seniority and other perquisites for Louisianans in Congress.
Regardless, the state’s Democrat Party forever is altered for national contests. Expect that within a few years, also as a consequence of redistricting, the only members of the U.S. House will be Republicans and black Democrats, and just one of the latter at a time. It also is logical that when Sen. Mary Landrieu leaves office, perhaps as early as the beginning of next year, few if any white Democrats will find their way to the U.S. Senate for the foreseeable future. These are the consequences of the chickens coming home to roost on the Louisiana Democrat plantation.
29.4.08
House, Jindal must intervene to save income tax reversal
Senators battled for the soul of the state’s people and taxpayers in today’s dealing with SB 87 that showed off some great fireworks. State Sen. Buddy Shaw’s bill would phase out in a few years the increase in income taxes that came as part of the “Stelly” Plan. The Democrat-controlled Senate took this as an opportunity to fight back against tax cuts in particular, and Gov. Bobby Jindal and Republicans in general, demonstrating classic legislative shenanigans fully compliant with the state’s history of populism.
The big point of contention came when state Sen. Nick Gautreaux sent up an amendment that would phase out income taxes entirely over 10 years. Shaw and state Sen. Robert Adley were persistent critics, accusing Gautreaux of trying to sink the bill which he consistently denied. After all the shouting died down, it passed 19-18 with mostly Democrats in favor (just state Sens. Bill Cassidy and Steve Scalise in favor as Republicans) and most Republicans and a few Democrats against. (Sen. Julie Quinn missed the day’s votes; being a Republican unless she indicates otherwise she might have provided the 19th vote against and had the bill go clean.)
State Sen. Joe McPherson has the most interesting comments. He said he voted for the amendment, and pointed out that Gautreaux actually held his vote his own amendment band essentially tricked him into voting for it, because he wanted to be on the record for getting rid of income taxes. By contrast, he noted that all the other Democrat amendments were withdrawn meaning they were disingenuous. At the same time, he said Gautreaux was sincere in trying to get his amendment into law, which he has introduced as separate legislation before. Still, the matter should be repealing Stelly, not the larger matter of income taxes, and therefore he would vote for Shaw’s amendment to undo.
The big point of contention came when state Sen. Nick Gautreaux sent up an amendment that would phase out income taxes entirely over 10 years. Shaw and state Sen. Robert Adley were persistent critics, accusing Gautreaux of trying to sink the bill which he consistently denied. After all the shouting died down, it passed 19-18 with mostly Democrats in favor (just state Sens. Bill Cassidy and Steve Scalise in favor as Republicans) and most Republicans and a few Democrats against. (Sen. Julie Quinn missed the day’s votes; being a Republican unless she indicates otherwise she might have provided the 19th vote against and had the bill go clean.)
State Sen. Joe McPherson has the most interesting comments. He said he voted for the amendment, and pointed out that Gautreaux actually held his vote his own amendment band essentially tricked him into voting for it, because he wanted to be on the record for getting rid of income taxes. By contrast, he noted that all the other Democrat amendments were withdrawn meaning they were disingenuous. At the same time, he said Gautreaux was sincere in trying to get his amendment into law, which he has introduced as separate legislation before. Still, the matter should be repealing Stelly, not the larger matter of income taxes, and therefore he would vote for Shaw’s amendment to undo.
28.4.08
Sensible changes resolve Jindal/House budget dispute
Given the complexity and intricacy of dealing with the Louisiana state budget, it’s easy to get lost in the policy debate between the Gov. Bobby Jindal Administration, which favors using $420.1 million in surplus revenues to fund recurring programs, and House leaders, who are angling to reduce that figure. Sorting it all out gives a better idea of how to proceed.
First, there is a bit of conceptual confusion involved. When the Administration speaks of using “one-time” revenues, it’s not the same thing as “non-recurring” revenues which in fact can be used constitutionally for just a few purposes. The revenues referred to in this debate are those declared surplus over previous projections before the fiscal year is over, meaning they can be used for any purpose. Because they are unexpected, they might be temporary in that similar amounts might not be forthcoming in future years, and projections suggest that they won’t be. Thus, we don’t really know whether that level of revenue will be sustained, so the argument is over, whether to be on the safe side, if these “excess” revenues be committed to recurring expenses.
In reality, after the second special session, about $900 million was left of this recurring surplus, of which the $420.1 million will go to recurring spending. The rest is for what is considered non-recurring expenditures, on a variety of things the House is looking critically on including $307.1 million for an economic development “megafund” to attract large employers. But is also in interested in paring down other “new” spending it sees elsewhere in the budget besides that directly tied by the Administration to this surplus.
Second, the $420.1 million that is directly tied goes into one area – health care spending. In contrast, the House when it declared it wanted to look at the possibility of 5 percent cuts across the board in discretionary general spending of the state general fund – which exempts almost three-quarters of spending (including that by the Executive Department as most of its funds, even if not legally or constitutionally protected, are passing through from the federal government for recovery purposes) – it included every agency. While health care takes up the vast bulk of this amount, higher education at around a tenth of it could be disproportionately affected. So if the House wanted to make cuts, some might come not from the area that is getting all of the “one-time” money for recurring purposes.
Third, the House points out other new commitments are in the budget not tied to the surplus, which the Administration disputes only in terms of the amounts. These it has declared also may become targets of its cutting. Finally, to add to the fun, momentum is growing to pass an income tax cut that could remove, in the short term, $302 million in revenues, which actually creates an additional issue since it can be like declaring that amount of money itself is now “one-time.”
Even as the Administration has reduced use of surplus revenues by almost half over last year, given looming budget deficits probably it is a good idea to reduce them further, not by some arbitrary amount, but by excising items that, in policy terms, have a low or negative return. As it is, it doesn’t total the $420.1 million, but it’s a beginning.
This figure should not include the tax cut because it is conceptually erroneous to define that forgone revenue as “lost” and therefore “one-time.” In reality, history shows a tax cut of that magnitude within one or two years should begin to restore revenues from increased economic productivity that will close the hole within a few years. Thus, like the megafund, it really is a one-time “expense” and, as suggested elsewhere, therefore should be pursued instead of the addition to the fund.
Several other items stand out in the budget that should not require new commitments, also mentioned elsewhere. One is continuing to give pay raises to public school teachers who have yet to show their existing salaries match student achievement and who refuse to accept individual accountability measures tied into their abilities which could save $56 million.
Another is reducing outlays to higher education. My colleagues will be miffed by my pointing this out, but almost every school in the state got a big increase last year and unless a school’s administration was entirely reckless in utilizing it, a five percent cut would at best mildly impair operations and leave schools well above their level of two years ago. And there may be relief on the way in the form of governing boards being allowed to raise the lowest average tuition in the South courtesy of legislation making its way through the chambers (even if it gets diluted by the fact that roughly half of Louisiana in-state college students have their tuitions paid through the TOPS program). This would save (if across the board) $71 million – but tuition increases of 3 percent would capture back roughly $13 million.
Finally, there are additional monies for nursing homes, whose share and dollar amounts in the budget ought to be declining as the state moves more towards community-based case. This is a consequence of the Barthelemy case brought a decade ago mandating that the state spend more for that type of care, which is why the Administration budgeted $169 million in new commitments. The problem is, there are no offsetting cuts to nursing homes which are already among the most over-utilized and over-bedded in the country. The $60 million increase here should scrapped; if necessary, by changing the law passed a couple of years ago which encourages over-utilization.
This totals $186 million – a good start. The rest may be made up in future years by realigning indigent health care to emphasize money following the person rather than going to institutions that will reduce expenses, and with new revenues generated from the tax cuts. Such reconfiguration of the budget will put Louisiana on its best financial footing in decades.
First, there is a bit of conceptual confusion involved. When the Administration speaks of using “one-time” revenues, it’s not the same thing as “non-recurring” revenues which in fact can be used constitutionally for just a few purposes. The revenues referred to in this debate are those declared surplus over previous projections before the fiscal year is over, meaning they can be used for any purpose. Because they are unexpected, they might be temporary in that similar amounts might not be forthcoming in future years, and projections suggest that they won’t be. Thus, we don’t really know whether that level of revenue will be sustained, so the argument is over, whether to be on the safe side, if these “excess” revenues be committed to recurring expenses.
In reality, after the second special session, about $900 million was left of this recurring surplus, of which the $420.1 million will go to recurring spending. The rest is for what is considered non-recurring expenditures, on a variety of things the House is looking critically on including $307.1 million for an economic development “megafund” to attract large employers. But is also in interested in paring down other “new” spending it sees elsewhere in the budget besides that directly tied by the Administration to this surplus.
Second, the $420.1 million that is directly tied goes into one area – health care spending. In contrast, the House when it declared it wanted to look at the possibility of 5 percent cuts across the board in discretionary general spending of the state general fund – which exempts almost three-quarters of spending (including that by the Executive Department as most of its funds, even if not legally or constitutionally protected, are passing through from the federal government for recovery purposes) – it included every agency. While health care takes up the vast bulk of this amount, higher education at around a tenth of it could be disproportionately affected. So if the House wanted to make cuts, some might come not from the area that is getting all of the “one-time” money for recurring purposes.
Third, the House points out other new commitments are in the budget not tied to the surplus, which the Administration disputes only in terms of the amounts. These it has declared also may become targets of its cutting. Finally, to add to the fun, momentum is growing to pass an income tax cut that could remove, in the short term, $302 million in revenues, which actually creates an additional issue since it can be like declaring that amount of money itself is now “one-time.”
Even as the Administration has reduced use of surplus revenues by almost half over last year, given looming budget deficits probably it is a good idea to reduce them further, not by some arbitrary amount, but by excising items that, in policy terms, have a low or negative return. As it is, it doesn’t total the $420.1 million, but it’s a beginning.
This figure should not include the tax cut because it is conceptually erroneous to define that forgone revenue as “lost” and therefore “one-time.” In reality, history shows a tax cut of that magnitude within one or two years should begin to restore revenues from increased economic productivity that will close the hole within a few years. Thus, like the megafund, it really is a one-time “expense” and, as suggested elsewhere, therefore should be pursued instead of the addition to the fund.
Several other items stand out in the budget that should not require new commitments, also mentioned elsewhere. One is continuing to give pay raises to public school teachers who have yet to show their existing salaries match student achievement and who refuse to accept individual accountability measures tied into their abilities which could save $56 million.
Another is reducing outlays to higher education. My colleagues will be miffed by my pointing this out, but almost every school in the state got a big increase last year and unless a school’s administration was entirely reckless in utilizing it, a five percent cut would at best mildly impair operations and leave schools well above their level of two years ago. And there may be relief on the way in the form of governing boards being allowed to raise the lowest average tuition in the South courtesy of legislation making its way through the chambers (even if it gets diluted by the fact that roughly half of Louisiana in-state college students have their tuitions paid through the TOPS program). This would save (if across the board) $71 million – but tuition increases of 3 percent would capture back roughly $13 million.
Finally, there are additional monies for nursing homes, whose share and dollar amounts in the budget ought to be declining as the state moves more towards community-based case. This is a consequence of the Barthelemy case brought a decade ago mandating that the state spend more for that type of care, which is why the Administration budgeted $169 million in new commitments. The problem is, there are no offsetting cuts to nursing homes which are already among the most over-utilized and over-bedded in the country. The $60 million increase here should scrapped; if necessary, by changing the law passed a couple of years ago which encourages over-utilization.
This totals $186 million – a good start. The rest may be made up in future years by realigning indigent health care to emphasize money following the person rather than going to institutions that will reduce expenses, and with new revenues generated from the tax cuts. Such reconfiguration of the budget will put Louisiana on its best financial footing in decades.
27.4.08
Jindal tax cut resistance threatens self-inflicted wound
The Gov. Bobby Jindal Express actually found a train traveling faster than itself last week. Whether it’s going to get out of the way, latch onto it, and take it over is another matter, the decision about which can have tremendous political reverberations.
Jindal’s gubernatorial campaign rhetoric spoke of creating smaller government and hoped (but did not promise in his first term) to achieve reductions if not the elimination of income taxes. Yet Jindal also made clear the state faced major fiscal problems, principally the previous commission of non-recurring dollars for recurring expenses, that also needed to be worked out, and so thus his first budget contained no income tax reduction.
But in light of large surpluses from the recovery-stimulated budget, and to fulfill a campaign promise by state Sen. Buddy Shaw, his SB 87 was introduced to cut income tax rates back to the levels prior to enactment of the “Stelly Plan” five years ago which saw some hefty income tax increases. Perhaps unexpectedly, it received a very enthusiastic response in committee as even senators who in the past had thrown cold water on income tax cuts now endorsed it.