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29.5.12

With chicken hawks checked, real fiscal debate may start

The majority rules in our system of government, and with the governor and one chamber of the Louisiana Legislature cornering the other, the only overall question is whether how quickly and how much resistance will be encountered in dealing with both a current year budget deficit and production of one for the next fiscal year – and whether this resolution starts a meaningful conversation about the proper role and scope of government for the future.

On Memorial Day, the Senate by way of one of its committees restored much of the spending from the budget originally forwarded by Gov. Bobby Jindal to the House. This action signals to the House that it cannot pass its version, and must acquiesce or continue to drag out a process that only will discomfit those wedded to opposition. The panel did so in a manner designed to give the House majority maximum cover – because the argument all along has been symbolic, not substantive.

Had the argument been one of substance – what is the appropriate amount of revenue to be raised by state government and the appropriate things on which to spend it, with an equilibrium point established by the value of an incremental function of government being performed equaling or exceeding the injury done to the people by removing their property in order to pay for it – things would have turned out very differently than what occurred in the House. Instead of taking an artificial concept – “one-time money” – and making that the baseline on which to establish a spending figure in addition to official recurring revenue forecasts, followed by abdicating the responsibility to specify and justify areas of  low priority to eliminate to the executive branch with only vague, if not unrealistic, guidance on how to do so, the substantive approach would have been to collect all recurring monies, match them in accordance to functions by need by whatever legal means necessary, and then during debate explain what things previously funded were not going to be and why.

But the so-called “fiscal conservatives” took the symbolic approach. They embraced a problem created by the very process – a state fiscal structure that through the overuse of dedications misallocates revenues – then decided to embrace the artificiality of “one-time money” – defining it as nonrecurring in nature when in fact a significant portion of it recurs with regularity – as a cudgel to use to hack away at spending to “prove” they are what they say they are – but then handed the cudgel to the executive branch to do their dirty work for them, enabling them to blame it and others in the future if the cuts they forced proved too unpopular.

It’s a great political strategy if you’re unserious about having a genuine debate over the appropriate amount of government taxing and spending, where you goal is more to preen to voters than actually act as a fiscal conservative. Real fiscal conservatives, by contrast, would implement a review of all sources of revenue in government, including exceptions made and purposes to which they are dedicated, decide whether the exceptions serve a necessary public purpose and that the dedications are appropriate and/or are commensurate in amount to the function needing funding, and then realign the system to generate the appropriate amount raised in a manner where it can be directed proportionally to actual needs in order of priority.

That’s a much more intellectually-demanding and politically-daunting exercise than the approach taken by many in the House (nor possible given just this one session and in one where eliminations or reductions of tax credit, deductions, exemptions, and exclusions cannot be considered), but one that the Senate Finance Committee at least started on. Taking the budget from the House, which had dropped all of the one-time money (even if in name only) it restored about all of that money and more that the House had rendered vague instructions to the executive branch by which to cut, and then went to the trouble of engaging in the exercise of matching the genuine nonrecurring revenues tucked away in the operating budget to one-time expenditures in it.

If this product passes out of the Senate relatively unchanged, likely a House majority will go along with it. Those fiscal chicken hawks who especially want to wring political points out of the situation will rail and vote against it but enough others will declare victory, arguing they forced the Senate and governor into greater fiscal propriety when in fact nothing of the sort will have occurred, much less by their own efforts, because all along that never was the debate they had.

Hopefully, the exercise’s conclusion will produce a kickstart to the debate that has not been had but is necessary in order to optimally match revenues to spending and the appropriate amount of expropriation of the people’s resources in order to finance this.

3 comments:

Anonymous said...

Contrary to you, I strongly believe spending one-time, non-recurring revenues for recurring operating expenses is a huge, real problem.

Apparently, that is what the Governor believed five years ago. At least, that is what he said.

No longer. Was he right then, or now?

Anonymous said...

Jeffrey Sadow calling House conservative "chicken hawks" is quite ironic, considering Sadow's hero, Bobby Jindal, is the most chicken shit Governor we've had in a long time.

Say what you will about Kathleen Blanco. Yes, a bad Governor, but at least he didn't hide under her desk every time someone in the media wanted to ask her a question.

Anonymous said...

REPEAT: Was he right then, or now?