The state’s current budget situation—as much as a $1 billion revenue shortfall come July 1—is troubling, not in the least because lawmakers have known it was coming for two years but didn’t take any meaningful steps to avert it through fiscal reform, says Business Report Editor Stephanie Riegel in her latest column.
“Equally troubling,” she writes, “is the disinformation campaign being waged by critics of Gov. John Bel Edwards—namely Republicans determined to thwart a Democrat at all costs—who are peddling the fiction that hundreds of millions of dollars in wasteful spending could be cut from the budget to help mitigate the crisis if only the governor would exercise some fiscal restraint.”
Critics of the governor say Louisiana has a spending problem, not a revenue problem. But that’s just not true, Riegel says.
“In an era where Fox & Friends passes as a trusted source of daily news by an alarming percentage of the so-called educated public, it’s really not surprising that mantra would stick,” she writes, adding the hyper-partisan political culture that defines Washington politics now poisons Louisiana’s swampy backwaters.
The general public and the business community need to recognize this, Riegel says. They also need to be aware of some basic facts. Among them:
- The $1 billion fiscal cliff was created when this same Legislature passed temporary sales taxes in 2016 to avert what was then a $2 billion revenue shortfall created, in large part, by the fiscal tomfoolery of the Jindal administration.
- A task force created in 2015 produced a comprehensive series of fiscal reforms to address the state’s chronic fiscal crisis. Had those reforms been enacted in 2016 or 2017, the state wouldn’t be in the mess it’s in now, or nearly as bad a mess. Lawmakers didn’t want to tackle the politically unpopular work of changing the tax code and shifting burdens around, so they punted.
- The $28 billion state operating budget has grown over the years. But the growth has come from the federal side of the state budget, which pays for programs like Medicaid. Federal dollars account for roughly 40% today compared to 23% in 1982. The state general fund, which is $9.4 billion this year and would drop to just $8.6 billion in the post-fiscal-cliff doomsday budget, has not grown under Edwards. In fact, the 2018 fiscal year budget was about $1 billion less than it was in 2008, a year flush with post-Katrina recovery money.
Read the full column. Send your comments to editor@businessreport.com. Also, check out Business Report Publisher Rolfe McCollister’s new column, which offers a different take on Louisiana’s fiscal crisis.
