What's important to us?
Sometimes events converge, forcing us to examine our beliefs and make a choice. We, in Louisiana, face a big one.
It deals with taxes, our expectations of government and the level of service for which we are willing to pay. Triggering this "what's important to us?" moment is a momentum-gathering belief in the Legislature that the state can do just fine without collecting any personal or corporate income taxes.
A series of bills eliminating these taxes—either immediately or over a 10-year period—were filed by legislators, and all, in some form, are still alive heading into the regular session's homestretch. Whether these tax cuts happen this year is questionable, but there's little doubt the mood of the Republican-controlled Legislature is to pass them—if not this year, then in the very near future.
Particularly interesting is that this comes at a time when previous tax cuts, a dramatic reduction in federal money and a slumping economy have left government baffled as to how to address the $1.6 billion shortfall in the coming year's budget.
So consider what's happening: A Legislature struggling to patch a $1.6 billion hole is thinking about cutting an additional $2 billion in annual taxes—potentially giving them a $3.6 billion headache. Keep in mind, Gov. Bobby Jindal has said ad nauseam that as long as he's in office the raising of any tax, including the renewal of expiring taxes, or the elimination of tax breaks—no matter how ridiculous or outdated—is out of the question.
Some suggest further government cuts are in order, but cut what? Propose a specific cut and watch the hail of protest in response.
As one might expect, more than a few policy wonks at the Capitol are squirming at the possible conundrum.
Louisiana is a state with a history of ignoring reality and simply meandering to its own bon temps drumbeat. We've never been particularly concerned with sound fiscal policy [such as public retirement benefits that threaten to bankrupt the state within 20 years], a diverse economy, or the value of a quality education. Our response has always been: Who cares about tomorrow's problems today, when we've got crawfish, beer and—best of all—oil and gas.
We're also a state of contradiction. Extreme Christian faith dominates our population, yet any excuse to drink to excess is a good one—proving Jimmy Buffett's belief in a fine line between Saturday night and Sunday morning. We profess to distrust government and hate taxes, yet—thanks to the populist days of governors past—we're conditioned to expect that same government will solve all of life's problems.
In short, we want government to do stuff; we just don't believe that we should have to pay for it.
This is the state in which we live, which explains the state we're in—one of the poorest, least educated and unhealthiest in America.
So it makes perfect sense that legislators—struggling to balance a budget despite significant cuts to scores of programs—want to cut taxes in one of the nation's least-taxed states.
Indeed, there are states, including Texas and Florida, which have no income taxes. Those states do, however, have other taxes, like property taxes, to fund state government. Louisiana does not have a state property tax, but it does have the nation's highest homestead exemption on local property taxes. We also have one of the highest rates on the most regressive tax going—sales taxes.
Most tax experts have little objection to the notion of eliminating personal and corporate income taxes, and they'd be thrilled to cut the sales tax in half. The trade-off would be slicing the homestead exemption in half, to $75,000, and imposing state property taxes. Let's see an elected official facing re-election propose that idea.
This is a critical time in Louisiana's history. What seeds of optimism exist in this state are in danger of being blown away by reckless, ego-driven elected officials.
Few people like taxes, but is crippling the state financially the wise course when the services we demand from government were mediocre at best before this latest round of cuts?
Of course there's fat to be found, but can anyone, with any intellectual honesty, suggest there's $2 billion worth in the state's roughly $7.7 billion general fund?
Those who say yes shouldn't complain as this state grows poorer, gets dumber and becomes economically irrelevant—despite the fact we have oil and gas.
It's something to think about while you're stuck in traffic on a crumbling state-owned road.
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