State governments have lived on a sugar high for two years with record-busting national deficit spending force-feeding money to them, creating false economies fattening state coffers besides allocating bonus bucks to spend. This all will dissipate starting this year. Further, Louisiana has scheduled sales tax relief commencing in a couple of years and faces escalating payments to move its pension funds towards solvency.
The responsible approach would make few if any new commitments and find ways to shrink government. Then there’s the every-man-a-king approach taken by Edwards which ignores this reality and treats the state’s finances as if throws from a carnival krewe.
With $2.26 billion in surplus dollars courtesy of the federal deficit-spending largesse, $727 million must go to nonrecurring purposes. Plans for this aren’t the greatest – only a tenth is going to pay down pension fund gaps rather than using up to three-quarters of that surplus that would save money for local education agencies that would create a recurring revenue source to fund pay raises – but at least that remainder will fund infrastructure concerns.
By contrast, much of the rest would be frittered away on unnecessary and/or recurring commitments unsustainable in the future. For current year extra dollars, restoring state property, encouraging oyster harvests, and cancer research can wait, and sinking hundreds of millions into a holding fund for future transportation projects would be spent better on buffering for the roll-off of state sales taxes. Spending more of it on a green pie-in-the-sky hydrogen project and pumping still more into a higher education sector that will contract an estimated 7.5 to 15 percent in enrollment due to demographic changes by the start of the next governor’s term don’t make good sense. In all, $428.3 million would be spent unwisely by fulfilling these requests.
The upcoming year’s budget is worse. Rather than cut down on local unfunded accrued liability payments as described above that could facilitate pay raises from local monies, Edwards wants to throw more state dollars at another elementary and secondary education pay raise, and the same to higher education along with other expansive spending in that declining sector. This locks in $310 million more in future recurring expenditures.
Other spending also raises questions. Cybersecurity and early childhood education programs continue to draw new dollars, and the over $100 million this time likely is excessive. And there’s no need to make permanent last year’s $23.4 million total one-time supplemental pay hike for first responders, which is not a state obligation but that of local governments.
In all, Edwards proposes record general fund spending; in fact, if granted that would make general fund spending during his term eight of the nine highest in state history, including the top three. In total spending, with the last three years driven by the federal borrowing, with this request state spending will have gone from $24.3 billion to $45.7 billion, an 88 percent increase over a time span where price inflation rose (even after Democrat Pres. Joe Biden policies triggered the highest increases in four decades) just 24 percent. (And this total actually is a few hundred million below projected spending this year.)
Edwards audaciously asks for all of this as a last-ditch attempt to stamp an unsavory legacy onto the state. Even though additional known future spending and tax relief means by the end of the next governor’s term will create a shortfall of up to a billion dollars annually, Edwards chooses to be the grasshopper rather than ant as a way of making more difficult future tax cuts to right-size government, if not force more tax increases of the kind he championed throughout his elected career. It’s his way of reaching from the political grave to twist the arms of future elected officials who disagree with his agenda of empowering government over people.
And he’s not done. He desperately wants to make the claim that he brought educator salaries to the southern average, so if the surplus forecast increases later this spring he wants to throw that money onto the recurring bonfire as well.
Legislators do well to reject most of this new spending and instead target the money to cushion the scheduled sales tax decrease and in instituting the phased elimination of corporate franchise and income taxes, which in time will produce sustained higher revenues. The Edwards years have done enough economic damage to the state, and the warped vision in the document he presented can’t be allowed to solidify that.