LA GOP lawmakers must resist bad hikes, budget

In sparring with Democrat Gov. John Bel Edwards and legislative Democrats over the budget and taxes, to best serve the people Louisiana’s legislative Republicans need to keep a few things in mind.

In the next few days, they will deal with HB 12 by Democrat state Rep. Walt Leger. Now identical (even if the Legislature’s website has failed to keep up with things as of this post’s publication) to HB 27 by Republican state Rep. Lance Harris after Senate Revenue and Fiscal Affairs Committee action on both, it would extend into perpetuity a third of a penny temporarily put in place over two years ago, set to expire in a month. It also extends the items over which this sales tax would apply.

HB 18 by Democrat state Rep. Katrina Jackson also will come into the queue. It strips the exemption for income taxes paid in other states, which primarily hits middle-class-and-above tax filers. Both have passed the House and await Senate floor action.

SB 10 joins it them, raising the Earned Income Tax Credit 43 percent and awaiting House committee vetting. Also potentially out there, HB 13 by Jackson could raise corporate income taxes.

Finally, competing budget bills await after the revenue picture clears up. HB 1 by GOP state Rep. Cameron Henry would spend a bit more than revenue levels assumed by HB 27 prior to what the Senate committee did to it, while HB 26 by Leger offers a competing vision that spend about $250 million more, based upon the HB 12/27 versions after leaving the Senate committee.

HB 27 was, in a word, violated heinously but predictably by the committee. Only Louisiana would tolerate the backwards situation where Republicans have nearly a two-thirds majority in the chamber but permit Democrats a committee majority of over two-thirds, plus having its chairman. Not only did it inflate the tax increase involved and make it permanent, it did so in an amount designed to redistribute wealth by tying in the EITC increase. Its clone HB 12 will move to overcome likely parliamentary obstacles.

Now, that goes to the floor, where only just over half Republicans voting together can stop it. Undoubtedly, as all concerned want to accomplish the tail end of the project, a budget, negotiation will begin over the amount allowed out that can command the two-thirds vote necessary to pass a tax increase.

But they cannot forget to do first things first: they must make whatever hike comes about temporary. Bad spending practices and inappropriate priorities bloat the state budget, but lawmakers can’t resolve all of this in a month – especially when they must grapple with a governor diametrically opposed to changing this. The over-taxation that results puts a lid on the economy and unduly restricts revenues government can raise organically.

Over time, state government can catch up. The original 60-month extension probably went too long; probably in two years with enough fiscal discipline any budget gap will disappear, making the hike expendable. This cannot be a subject of negotiation. Anything but a temporary extension cannot pass, even if it means no new revenues and perhaps no budget.

After that, GOP Senators – and House members assuming this deal occurs – must torpedo the EITC hike. Doing more of a bad thing doesn’t make it better, and by jettisoning this the size of any tax increase and budget automatically moves down.

These critical items done and dusted, this pair can become part of an overall negotiation over amount of total tax increase and budget to result. Mixing in Jackson’s bills and bargaining over transactions taxable and amounts, and even increasing the rate of increase to no more than a half cent – so long as the total doesn’t exceed the $648 million identified as a projected budgetary shortfall – can happen, as long as Democrats meet the prior two conditions.

Republicans have a strong hand, for a core of at least three dozen House Republicans regularly vote against almost all tax measures that would sink any single such bill; 22 even would not go for HB 27 in its original form on a second try. They must play it out in the above fashion, regardless if that leaves the state with no budget.

Because that’s Edwards’ fault. He vetoed one that survived an override because every Democrat present voted against it (as well as GOP state Reps. Bubba Chaney, Patrick Connick, soon-to-depart Greg Cromer, Kenny Havard, Frankie Howard, Chris Leopold, Rogers Pope, Rob Shadoin, Joe Stagni, and secretary of state candidate Julie Stokes). Whatever halt to government services that may come from having no budget, he and Democrats own.

Legislators cannot allow baking in permanently larger government to pay for foolish spending choices. To prevent that, they must act accordingly as described.