Edwards, GOP legislators live on different planets
Louisiana Democrat Gov. John Bel Edwards is from Mars, legislative Republicans are from Venus. I chose the ordering since Edwards once served as a professional warrior and some GOP legislators are women. I chose the metaphor to illustrate the completely incompatible mindset of the two that threatens to launch fireworks during the state’s whirlwind special session.
Edwards pulled the starting gun trigger on it last night by speaking mainly to the virtues of using Budget Stabilization Fund Money. As policy-makers grapple with a $304 million deficit fighting a ticking clock registering just four-and-a-half months remaining in the fiscal year, use of the Fund has emerged as the biggest point of contention between the governor and Republican-led Legislature to solve for the shortfall.
In the speech, Edwards noted the short time frame and his belief that a straitjacketed fiscal structure begging for reform presented few options other than use of $119.6 million in Fund money. Citing its creation as a means to address short-term budgetary crunches and past use in what he saw as less critical times, failure to dip into it he alleged would force undesirable cuts into areas his current plan using Fund money to close the gap would avoid. He argued that, past this hurdle, soon the state could start attending to fiscal reform that should alleviate such problems in the future.
He tacked this way in order to fend off sentiments, mainly among House Republicans, who want to use for resolution fewer or no Fund dollars while making deeper spending cuts. In essence, he asked for bonus money now with a pledge to restructure revenues later so that in the future recurring funds would obviate need to dip into the Fund – all in the service of “rebuilding Louisiana,” a process he identified beginning last year with large taxes increases and modest expenditure reduction.
However, such a view remains incongruent with the mindset of those Republicans. Realize that Edwards sees the problem as insufficient revenue generated for a sufficient amount of spending that needs Fund money immediately but that in future structural fiscal changes will boost that amount of revenue. In other words, the amount of spending (including roughly $60 million in cuts he proposes) constitutes an absolute floor and that the state must match revenues to adjust to that, upwards.
This runs entirely counter to many Republicans’ desires. They see the variable measure needing adjustment as spending, a problem of excessive spending – whether defining that as dollars doled out to support a government function or forgone in collection as result of a tax break or fees not covering adequately costs to pay for a specific government service rendered – while the proportion of dollars taken from the people – in terms of income, sales, excise, and property taxes – should remain relatively fixed that produces a sufficient amount of revenue. In other words, the amount of revenues generated from existing marginal rates on income, sales, excise and property taxes – if not the lower amount prior to the rate changes of last year – constitutes the absolute floor and that the state must match expenditures to adjust to that, downwards.
That’s why they hesitate to use some or all of the Fund and want to cut spending now, because the absolute spending level is the problem and the Fund only acts as an analgesic that palliates but ignores the underlying disease of overspending. In contrast, Edwards sees the absolute amount of revenues as the problem, so he wants structural changes to increase those rather than reducing expenditures, meaning Fund use now bridges to the future where he can change things to capture more money.
The two views are irreconcilable. Edwards’ argument convinces only by adopting his premise that Louisiana does not spend too much but raises too little. That a significant number of Republicans reject that thinking, probably enough to meet the one-third requirement to veto Fund use, forecasts pyrotechnics to come in the next few days.
Posted by Jeff Sadow at 10:55