Following on plans released in recent months by the Louisiana Association of Business and Industry, as well as the Tax Foundation, the Public Affairs Research Council of Louisiana this morning released its plan for controlling state spending.
The PAR plan is being released as lawmakers prepare to tackle budget gaps of at least $750 million for the current fiscal year and $1.9 billion for the coming fiscal year in a three-week special session that begins the week after Mardi Gras.
PAR says Gov. John Bel Edwards needs to take two initial steps to deal with the current fiscal mess. First, he should provide a fiscal framework of how he expects budget and revenue measures will result in a sustainable budget for fiscal year 2017 and beyond.
“If additional revenues are to be extracted from business and individuals, then those taxpayers have a right to know what kind of government spending environment state leaders intend to promote,” reads the PAR policy brief. “This point is particularly important because the tax debate in the special session comes before the budget process in the regular session.”
Second, Edwards should pledge a list of specific assurances for cutting, controlling and containing expenditures and ask the Legislature to join him in this pledge, PAR says.
The PAR plan includes some of the same recommendations outlined in the plans from LABI and the Tax Foundation, which were released in November and December. They include freeing up some dedicated spending in the budget and limiting the use of one-time funds. PAR is also calling for a reduction in tax credits and sales tax exemptions as well as a reduction in individual subsidies and deductions, and new or increased tax rates or programs—noting this should be a move of last resort.
“Only after the above goals have been determined should the state seek to raise tax rates or start new taxing methods,” reads the PAR policy brief.
PAR says the governor and Legislature should pledge to control spending in a number of areas, including debt, state retirement systems, state employee pay and benefits, transportation, coastal protection and restoration, higher education and local government funding.
“So far, the new administration and many members of the Legislature have expressed a serious-minded interest in fixing the long-term budget imbalance,” the PAR plan concludes. “No matter what they choose to do, they will make decisions that are unpopular with somebody, somewhere. A more informed citizenry would be a benefit to them and the difficult process ahead.”
LABI released its comprehensive plan and recommendations via a three-part series of “Budget Basics.” The Tax Foundation plan was commissioned by The Committee of 100 for Economic Development, or C100, a private nonprofit organization whose members include the top CEOs of leading private and public companies in Louisiana and university presidents.
PAR says it also plans to release a citizens’ guide on tax and revenue options. See the complete PAR policy brief on its plan to control state spending.
—Steve Sanoski
