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8.6.17

Budget deal moves closer to right-sizing LA govt

It seems like things don’t change: the University of Oklahoma just keeps on winning gymnastics and softball national championships.

But things do change: Oklahoma’s winningest football coach of all time – consider this at a school with seven national championships – Bob Stoops is stepping down after 18 seasons.

At no time in its history has this tension played out more significantly in the Louisiana Legislature than in this month of June, which has featured one rearguard action after another by big government advocates to keep the good times rolling to inflate the budget. But when a budget agreement crystallizes sometime today (asseems inevitable), it appears another milestone in right-sizing Louisiana government will have been attained.

Essentially, transforming bloated government that takes too much to do unneeded things into one that fulfills only genuine needs while letting people keep more of what is theirs follows three steps. The first demands a change in attitude, from thinking of government as a vehicle to redistribute power and wealth to something that removes obstructions to give people the opportunity to acquire power and wealth on their own. This means ridding government of both corruption and inattentiveness in steering dollars to best uses.


Only two governors in the past century have even thought to seriously pursue this goal: former Republican Govs. Buddy Roemer and Bobby Jindal. Roemer’s efforts beyond trying to ferret out corruption didn’t last long, so only Jindal put forth a sustained effort. Some of his initiatives, such as reshaping a civil service system that compensated commensurate to work product, succeeded incompletely. Others, such as improved matching of needs of the developmentally disable to resources available and realigning state-run hospitals, brought significant, long-lasting beneficial change. Most successfully, Jindal’s technocratic approach to make government work better, even as that sometimes faced politicized resistance, stretched resources to have things done smarter.

Of course, progress stopped in Jindal’s last year, where he and the Legislature went along with tax increases rather than meaningfully reining in spending on things like movie-making, further altering the fiscal system to better match prioritized needs to resources, or asking service users to take more responsibility for their behavior. The first year of Democrat Gov. John Bel Edwards featured more of the same, although making those hikes temporary perhaps sent a breeze through indicating change in the air.

Incomplete as Jindal’s achievement was, his agenda started to move the needle to the point the second stage could commence: reversing the policy-making dynamic from policy driving taxation decisions. If elites largely saw government as a tool capturing resources to redistribute in ways catering to certain groups, then they would base policy-making on emphasizing collection of revenues to achieve that. But if the purpose of government became seen in a more holistic sense, as an institution that could claim only so much from the people because past a certain point that interfered too much with individuals’ ability to maximize their own life prospects (while levying sufficiently to cover tasks deemed essential, such as protecting from the excesses of nature and man, ensuring basic and competent schooling, providing for those who through no fault of their own are disadvantaged, etc.), then taxation would dictate policy.

In other words, this indicates awareness by policy-makers that they can prioritize government functions, and tacitly recognizes that some such activities, or higher volume of these, don’t constitute duties of government, but instead either operate as luxuries available when flush with resources or simply as things government should not pursue, with the latter’s provision best done by the private or nonprofit sector. This transition did find its way onto the radar during the Jindal era, really more in the form of reduction of state assistance, such as reeling in the tremendous discount college students enjoyed for their educations, than in eliminating whole functions.

But if practices under Jindal merely extended the leg, the final budget product coming into to focus for fiscal year 2018 looks as if the foot will touch down. Its construction rests on barely any tax increases and otherwise counts on only forecast revenues available, leading not just to not granting inflationary increases in government but actual cutting from the current baseline – itself sliced downwards earlier in the year. Further, the deal looks like it will mandate that agencies can’t spend all of what they get, becoming eligible to do so only if future revenue projections decrease from the assumptions used in building the budget.

Consider what the keepers of past attitude on the inflated size of government, Democrats in the Legislature and Governor’s Mansion, tried to do to prevent this arrangement. They stumped for an extra $440 million and tax increases to fund that, tried to induce more spending/tax hikes by holding hostage capital outlay projects, and threatened to veto any budget that did not spend at least everything available.

They will get none of that, in no small part due to the fact that Republican control of the House prevents hiking taxes and Democrats base their appeals to voters far more than the GOP does on what government does. To tell their constituents they would see nothing built in their districts or would shut down government because they could get only 98 percent of the spending they proposed Republican House leaders saw as essentially worthless bargaining chips.

If this budget result completes the stride, in the right-sizing process active rollback just remains – actually paring from government tasks it conceptually should not perform or eliminating underpriced services. Whether policy can transition to this final stage will become more obvious in what happens to the presumed “fiscal cliff” – the difference between projected tax revenues for fiscal year 2019 and baseline spending, with this budget estimated around $800 million as the temporary taxes roll off. Additional taxation to replace in part or whole the temporary taxes without serious consideration of more spending cuts would demonstrate the process contiunes unfulfilled.

Still, this budget represents progress, showing that even an entrenched aspect of Louisiana’s political culture can change – and, in this instance, in a beneficial way.

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