The new sales tax will help provide the state’s budget with some stability for the next seven years, but the state can’t afford to forgo a tax reform and must address its fiscal problems structurally, state Treasurer John Schroder insisted at Monday’s Baton Rouge Press Club luncheon.
“I used to say that we had the gun cocked and held to our heads. Now the hammer’s not cocked anymore, but they’re still holding the gun,” Schroder says. “There’s still just as much work to get done today as two weeks ago when the session ended.”
The state pension program, health care and capital outlay are among the state’s major spending problems, Schroder says, emphasizing the need of a state government that acts more conservative—not by political affiliation, but in spending. He says the state’s tendency to spend and shift money from its rainy day fund without replenishing it is a “smoke and mirrors act.”
He also stressed the need for a tax reform to help the state’s budget and boost the state’s bond rating. Moody’s Investors Service revised the state’s rating outlook earlier this month from negative to stable. Bond ratings determine how much it costs Louisiana to borrow money.
“The state tends to live by crisis to crisis to crisis to crisis, and we don’t do a whole lot of planning for our future,” Schroder says. “Everyone deals with the today and as a leader, we need to have discussions not only how we’re going to pay the bills today, but how we’re going to pay the bills 20 years from now.”