Edwards gambles reelection for history reversal

Louisiana’s Democrat Gov. John Bel Edwards has gone all in with a last desperate stand to grow state government – and which might backfire to cost him any hope of reelection.

Near the conclusion of the 2018 Regular Session of the Louisiana Legislature lawmakers passed a barebones budget that funded completely health care and elementary and secondary education, but left big cuts to some agencies through an across-the-board nearly 25 reduction from current spending levels. The Republican-controlled chambers then hoped in the following special session, currently meeting, to raise revenues and make supplemental appropriations to that.

But Edwards vetoed it. His goal all along has been to force the GOP majorities into, at the very least, making permanent tax hikes. Better, from his perspective, that these would hit incomes progressively and, best of all, rely more on corporate than individual incomes. He reinforced that in speaking to a pep rally just prior to the overtime session’s start, when he asked to renew as much as half of the expiring one cent sales tax, to remove some sales and incomes tax exemptions, and to raise income taxes on those who have large amount of federal income tax deductions.

Edwards didn’t explicitly say to make these changes permanent, but he didn’t have to. This mixture gives him the best chance to argue he brought stability to larger state government with the middle and upper classes paying disproportionately more for it, buttressed by the fact Republicans agreed with him on whatever of this goes through. Doing so makes his best selling point in a tough reelection campaign.

However, it runs counter to the wishes of the people as expressed through a majority of legislators. Republicans and their constituents generally wish to curtail a ballooning state sector while keeping resources in the hands of the people to maximize economic growth. This compels them to back, if they feel they must, the kind of tax with the least negative impact on growth – a consumption tax such as on sales – and temporarily, so as to remove its harmful effects as soon as possible that could forestall the growth necessary to fill government coffers and to reduce deficits.

With a budget in place, Edwards would have lost much leverage over the kind of tax renewal/increase for which he could bargain. On the one hand, he would have to accept whatever proposals Republicans offered, or else he would become responsible in fact and in the eyes of voters for the cuts that would ensue. On the other hand, by sending him temporary increases, his assent would make him unable to show voters he had done anything at all, much less permanently, to bring fiscal stability. While the first would damage his reelection chances more, neither would help those.

So, a veto ratchets up the brinksmanship. Recall that any tax increase would require two-thirds majorities in each chamber, so Republicans can stop whatever they don’t like. If they forward temporary sales tax hikes to Edwards as part of a budget deal, he must count on a veto threat, which would give the state no spending authority for the next fiscal year, as a sufficient deterrent. In other words, whereas Republicans could live with state government underfunded in certain areas, perhaps they can’t with no funding at all.

Yet that also increases the risk for Edwards. Because, even as the GOP majorities may not want a broke state to start fiscal year 2019, Edwards will catch much more blame among the public for this – especially as he turned down a budget that would have kept the state running in large part. Plus, legislators have another tool at their disposal – over the next dozen days they could override the budget veto and reduce Republicans’ political exposure while keeping Edwards’ the same.

However, this also would require a two-thirds vote, meaning a handful of Democrats in each chamber must go along. As well, for any temporary increase to go through, the same coalition must occur, and it likely would not unless Edwards lobbied his fellow party members to form it.

Thus, we are left with this: Edwards – who has uncertain reelection odds if he rams through permanent tax increases, less than even money ones if he swallows temporary sales tax hikes, and has no chance if the state has no budget by Jul. 1 – must hope the GOP blinks, with enough members fearing for their own reelection bids, and thusly instead of sending him temporary sales tax renewals its legislators knuckle under with permanent hikes.

It’s a gamble. But to win big you have to play big, and inability to turn back Louisiana’s public policy clock Edwards will consider a failure, regardless of whether it returns him to office.