Edwards can't win with sales tax cut bill

Even his Senate allies can’t help Louisiana’s Democrat Gov. John Bel Edwards from taking a hit on his tax-and-spend record going into a tough reelection battle.

That comes courtesy of HB 599 by Republican state Rep. Lance Harris, which next fiscal year would begin paring away a 0.45 percent sales tax increase Edwards backed initially as part of a larger increase in 2016, then renewed in 2018 at the present level for seven more years. That costs consumers an extra $392 million annually.

The bill should hit the floor of the House this week and go to the Senate’s Revenue and Fiscal Affairs Committee the week after. There, it will die, because even though Republicans outnumber Democrats nearly two-to-one in the Senate, Edwards teamed with his bootlicker GOP Sen. Pres. John Alario to stack that panel with a majority of Democrats, who will act to ensure the measure never forces Edwards to veto it.

But its journey to that point has forced the Edwards Administration on the defense, with it feeling compelled to try to argue against a tax cut. Starting with an $87 million haircut to revenue in fiscal year 2021, Harris and its supporters point out that the latest forecast revenues exceeded expectations on which was based the need for the hike, in a greater amount than the bill provides in tax relief next year.

Thus, Edwards Administration officials have tried various tacks to try to deflect from the fact that Edwards supports tax increases because he wants bigger government. In the measure’s first committee hearing, Revenue Secretary Kim Robinson tried her hand, firstly alleging that rising costs drove higher state spending for government higher, not an expansion of government.

It’s a wonder that those in the hearing room didn’t burst out in laughter at such an incredulous claim. Just to name the largest deliberate policy choice in dollars, by next year Medicaid expansion alone will cost around $310 million extra annually, dwarfing any alleged “savings.” Looking at Edwards fiscal policy more holistically, during his term state-sourced spending has increased at twice the rate of inflation; if really only uncontrollable costs on existing spending had occurred, that rise should have been around the inflation rate.

Perhaps aware of her faulty claim, Robinson tried to distract from that by saying, in other words, maybe taxes were higher, but why cut them if they remain so low by asserting that Louisiana has the fifth-lowest tax burden of any state, according to the Tax Foundation. It did – in 2012, well before Edwards, with legislative assistance, began hiking rates and paring exemptions.

Naturally, Robinson failed to report more recent data that invalidates the contention that Louisiana has an appropriate level of taxation. The state has the sixth-worst business climate on the basis of taxation, the second highest state and local sales tax rate in the country, the fifth-ranked such collections per capita, and has state and local revenue per capita spending and collection around the top two-thirds of the states. Louisiana is a lower- rather than higher-taxed state, but with such a lousy business climate it needs a reversal of the recent tax hikes (in 2012 with less taxation than today, Louisiana ranked 12 places higher in business climate).

Edwards’ executive counsel Matthew Block took the swings at the next committee’s meeting, just as unsuccessfully. He asserted the bill would disrupt the stability – defined by Edwards as taxing more to meet spending rather than cutting spending – of present operations, even though it wouldn’t take effect until next year.

Whereas Robinson tripped up on facts, Block lost it on logic. Present spending choices of legislators aren’t set in stone; indeed, the House has brought considerable pressure in the past couple of years to cut spending only to have the Senate thwart it. If a cut now contributed to a deficit relative to continuation of spending at present levels in the future, those legislators still have a variety of options available to balance – some which don’t even involve taxes or spending. Just with Medicaid, things such as increased patient responsibility, work requirements, or managed care for waiver program users together would save hundreds of millions of dollars without cutting services.

By going on the record with these inadequate defenses, Edwards gives his gubernatorial opponents plenty of ammunition to highlight expanding government caused by higher taxes on his watch, and his resistance to curbing that. He might get his Senate allies to sabotage the bill, but the debate around it will damage his reelection candidacy.