HB 62 by
state Rep. Katrina
Jackson in normal times would be regarded as a detestable standalone tax
increase. But with a budgetary gap in the neighborhood of $900 million needing
closing prior to the end of June, these abnormal times sanitize it for
swallowing. Understand that it only exacerbates the problem of state government
overspending in Louisiana, as the state ranks 18th
highest among them in that per capita
spending (using estimated 2015 expenditures)
Ideally, Louisiana would adjust
down its level of spending, as well as allocate revenues so that they more
likely get to priority areas, in response to stagnant revenues and escalating
expenditures as a means to right-size bloated government. The short term makes this
impractical for the remainder of the fiscal year, but entirely realistic for
the longer term. Thus, any tax hikes now proposed must last as brief a time as
possible – apparently through Jun. 30, 2018 given the need to use the funds for
recurring expenses while adhering to statute and the Constitution.
But the Senate
took the HB 62 18-month House deadline and turned it into 60 months.
Despite its having a Republican majority, too many of the Senate GOP accommodate
themselves to bigger government, meshing with the desires of Democrat Gov. John Bel Edwards to
grow government. And, like Edwards, they want expiration to occur after the
next elections in 2019, so that their love of big government and taking more of
the people’s money to finance it does not become exposed not much prior to
reelection possibilities by going on the record in support of continuing the
higher level of taxation.
As a sop to try to convince the
House to go along, the Senate inserted a clause that
reduces the increase in quarter increments for a fiscal year if the Revenue Estimating
Conference certifies prior to each regular session that revenues from other
sources have made up a quarter or more of the estimated proceeds from the hike
from this year’s baseline total of forecast general fund revenues. But this
sleight of hand does nothing to reduce the size of government; it deems current
expenditure levels acceptable and does not eliminate the possibility that other
kinds of tax increases can substitute in to keep spending higher than
appropriate.
Therefore, the House must reject
this red herring and insist upon a 26-month deadline, keeping the de-escalation
clause if it likes. It has the leverage to do so, in that it has sent forward a
bill that would make deeper cuts to spending that Edwards wants and it holds
three other revenue-raising bills that would raise about a fifth of the HB 62
total. It could promise not to act further on the cuts bill and pass the others
in exchange for limiting HB 62’s effective period.
And it does hold all of the cards
here. Assuming HB 62’s passage in its current form, the state still lacks around
$200 million to close the gap. As the regular session disallows considering almost
all tax measures and timing would permit little time to call another special
session before fiscal year’s end, the only options left would be cuts made by the
Legislature and Edwards. Do the Senate and Edwards really want to enforce such
cuts just because they hold out to keep a tax going longer? Voters almost certainly
will blame them before House members that tried to hold the line on taxes, and
to rub salt in their wounds they will have failed partially in their plan to
retain bigger government than necessary.
Usually when two of three of the
governor, Senate, and House come into conflict with the one other, the united
pair wins. However, given the dynamics of this situation, if the House
(essentially, House Republicans) stands firm, they can prevent higher taxes
from sticking around longer than needed and in the process begin the process of
trimming Louisiana government to an appropriate level; if not immediately because
of the extreme times, at least in the near future.
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