Edwards’ doomsday budget speech draws mixed results from business groups

There’s no question Gov. John Bel Edwards focused the attention of the people of Louisiana on the state budget crisis late Thursday, when, first, his administration announced it was suspending payments to TOPS and then, an hour later in a televised speech he called into question the future of LSU football.

But Edwards didn’t necessarily do himself any favors with a business community that is already skeptical about his revenue-raising plan for dealing with the massive budget deficits, which approach $850 million for the current fiscal year and nearly $2 billion for next fiscal year.

“I think threatening LSU football is not really appropriate and not really accurate,” says Stephen Waguespack, president of the Louisiana Association of Business and Industry. “Everyone knows we’re in a serious situation but last night was more about rhetoric than reality.”

Michael Olivier, who heads the Committee of 100 of Louisiana, a New Orleans-based business roundtable, says he’s already hearing from business leaders this morning who are skeptical about the governor’s assertions that hospitals and universities will shut down if the legislature doesn’t pass hundreds of millions of dollars in tax increases at a special session that begins Sunday. Still, Olivier thinks Edwards’ live, televised address to the state—a first—will help the chances of passage for a one-cent, temporary sales tax increase.

“I think he is attempting to make people realize how awful this is,” Olivier says. “They’ve heard it often, but he has also been hearing from the naysayers who don’t want to raise any taxes so he was trying to address that.”

Tactically, part of the strategy behind Edwards’ speech could be to give those Republican lawmakers who oppose the governor’s tax plan some coverage in their conservative districts, according to Barry Irwin, president of the Council for A Better Louisiana. At the same time, going directly to the people with a doomsday scenario could also backfire with some lawmakers.

“You have to be realistic, but that can backfire if you go overboard,” Irwin says. “Everything he said is true but only if the Legislature comes up with zero money whatsoever and that’s not going to happen.”

Senate President John Alario, the dean of the Legislature who is known for his ability to work with those on both sides of the aisle, predicts the speech will draw mixed reaction from his colleagues. But he says his phone is ringing off the hook this morning with calls from concerned parents and constituents. He gives the governor high marks for trying to communicate the seriousness of the state fiscal situation and believes, ultimately, lawmakers will find a way to balance the budget with cuts and tax increases.

“In the end, there will be some combination of the two,” he says.

LABI’s Waguespack says his group is willing to work towards a compromise and recognizes some tax increases will be necessary. But he says the administration needs to stay away from scare tactics.

“Hopefully last night was the last vestige of rhetoric we have to tolerate before we can get to real business,” he says.

—Stephanie Riegel

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