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GOP brakes on Blanco paying off with better policy-making

During last December’s special session, House Republicans offered the author of the session, Democrat Gov. Kathleen Blanco, a choice. Blanco wanted to spend huge sums of money on a number of projects including transportation projects as projected state surpluses began to increase. But the GOP lawmakers argues there was a hastiness in it all and they wanted time to get a better handle on economic conditions in the state and to derive plans for spending these alleged funds. Thus, any additional spending at this time they said should be offset by reductions in other areas. Blanco refused this entreaty, Republicans refused to raise the state’s spending cap, and the session fell apart.

The wisdom of the GOP approach recently received confirmation over the issue of roads improvements. The state faces a tremendous backlog of such funding of $14 billion which has gotten to the point that current revenues dedicated to roads in just a couple of years will no longer be sufficient to fully match federal monies available, exacerbating the problem even more. A number of solutions involving some kind of tax or fee increase have been floated, such as indexing to inflation gasoline tax levels and raising fees on vehicle registrations.

However, relying on these as a means of receiving the full match and to work preventing the backlog from growing, or even reducing it, rests on the tired old assumption that spending priorities don’t get met because not enough revenue is being squeezed from Louisiana taxpayers and roads users. Instead, it fails to comprehend that the priorities themselves are incorrectly ordered.

Unfortunately, Louisiana has a patchwork system of revenue dedications that often make no sense. While there are crazier examples both real and contemplated (such as tobacco taxes to fund teacher salary increases), one such extant is that sales taxes collected on vehicle purchases get dumped into the general fund. Instead, Independent state Rep. Joel Robideaux and Republican state Sen. Mike Michot argue, why not dedicate these to going into the Parish Transportation Fund, the instrument by which money is doled out to spend on state highways/local roads? This would boost by $300 million a year spending on roads.

Further, in legislation they are developing, Michot and Robideaux wish to reallocate funding in a manner that better addresses priority needs. At present, the state controls centrally the system. The proposal would give parishes more leeway in determining how to use the annual cut they get from the fund, governments which probably have a better grasp on where the true needs are.

Best of all, it would cost citizens no additional money. The authors calculate that growth in state sales taxes would be about $300 million this year, meaning just some restraint in spending increases on peripheral matters at the state level would in essence transfer money from low items to this high-priority one without confiscating more from the citizenry.

It’s not something that has seen the legislative light of day previously, and was not ready in December as details still are being worked out presently. It certainly is much better thought out than Blanco’s plan to just dump on a one-time basis hundreds of millions of dollars without little regard given to how it actually might be spent. This idea is a good example of how superior policy gets made when care and prioritizing are primary concern, rather than reducing policy-making to a race to spend recklessly the people’s resources.

1 comment:

JohnnyB said...

Great article and great news on the budget. I was shocked to hear there would be a surplus in Louisiana. I heard that Nick Geautreaux is even trying to phase out the Louisiana income tax, which would be offset by the sales tax...does this issue have any traction?