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Jindal offers best hope for good LA state fiscal policy

Interviews with the major Louisiana gubernatorial candidates about state fiscal policy, especially dealing with a projected $1 billion surplus, for the upcoming year more than anything it else make it seem like they’re all trying to say the same thing. Still, they managed to show enough of a varied response to reveal how well in touch with reality they appear to be, and thus who best may serve the state.

Least realistic is Democratic Public Service Commissioner Foster Campbell, and not just for his economy-killing oil processing tax which itself won’t work and for that reason is highly unlikely ever to pass the Legislature and to get a vote of the people for it to go into effect even if Campbell pulled off an unlikely win. Rather, it’s the statement by Campbell that he’s a “fiscal conservative.” His past record as a state senator shows no fiscal discipline at all, and even today, by way of example, he continues to support big government spending such as throwing money at an unnecessarily-large new charity hospital in New Orleans to prop up an inefficient, underperforming health care model. His would be dangerous hands in which to trust Louisiana’s economic policy.

Businessman independent John Georges, who touts his background, seems out to lunch on the issue when he declared surpluses of the past couple of years were not part of hurricane disaster recovery money from the federal government. Months ago the figure was $60 billion having flowed to the state, and it shouldn’t take running a huge company to understand 4 percent sales tax here, income taxes of 2 to 6 percent there, and then payroll taxes on top of it, that the state has pulled in several billion bucks in revenues from it. If Georges cannot understand this, it’s hard to trust him to make good economic policy for the state.

Democrat state Sen. Walter Boasso hits the rights themes – it’s just that you can’t really tell what he’s going to do. He speaks broadly – “put all of the tax breaks on the table and make sure taxpayers are truly benefiting from them,” “eliminate deadhead jobs and emphasize positions that directly serve the public,” etc. – without giving detailed approaches to accomplishing these goals, making him sound like all hat and no cattle.

Republican Rep. Bobby Jindal seems to have the most accurate, comprehensive idea of what good fiscal policy would be. He and Boasso (and, to a lesser extent, Georges) sing together but Jindal puts his money where his mouth with specific ideas, for example, about business taxes, freezing salary increases for unfilled jobs (if not eliminating them entirely), and the like.

Still, all the candidates must come to grips with the fact that any currently-projected surplus (to be officially declared in December) is one-time in nature and so only can address fiscal situations created by poor policy in the past, but this does nothing the address the biggest ongoing problem with Louisiana’s fiscal policy – too much money being taken from the people and business subsequently spent on too many dubious things. Even Jindal may not fully appreciate the gravity of situation when, commenting on Gov. Kathleen Blanco’s pushing through targeted measures to begin next year that will much less efficiently spur economic growth for political reasons instead of broad-based tax relief that he had suggested, he said these breaks may not pose a significant problem for the state’s fiscal picture.

If, taking Jindal’s idea of eliminating the state’s income tax realistically (not Campbell’s proposal, which is unrealistic) as an example, you want to use the projected surplus in the fashion best able to accomplish this, it would be to pay down outstanding debt Blanco sent to record levels, right off the top maybe $50 extra million a year would become available to offset the temporary loss of revenue from an income tax reduction or elimination (eventually growth triggering more than enough new revenue to offset it in the long run).

The real proof of the quality of the candidates, however, would come if there turns out to be additional monies to be spent on recurring expenditures. Here, for the state to prosper, priorities must be not on doing the same old thing that got Louisiana into a slow-growth mode (such as Campbell’s and Boasso’s desire to keep the creaky publicly-delivered indigent health care system afloat) but to shift money from government to the people where faster growth benefiting all of society will occur (as in Jindal’s desire to move away from the existing indigent care system based upon charity hospitals). And the record shows Jindal has the most realistic vision and road map to get the state there.

1 comment:

Anonymous said...

What is Jindal's proposal to eliminate the state income tax? Has he committed to attempt to eliminate it?