Louisiana is well positioned to enter an era of prosperity the likes of which we have not seen in decades, but we cannot pretend there isn’t a very real threat to the significant progress we’ve made. Louisiana is facing a nearly $1 billion fiscal cliff, which if not addressed by July 1, will force catastrophic cuts to critically important state programs and services that Louisianans rely on.
The fiscal cliff is a problem that has been festering since the Legislature approved temporary revenue measures 27 months ago instead of permanent measures that would have historically reformed our tax code. While lawmakers committed in 2016 to return to Baton Rouge to implement comprehensive reforms, over the course of six legislative sessions the only things they have approved are temporary revenues that will soon expire. Without action from the Legislature, many of the most important services you rely on that are funded by state government will have to be cut. That’s not a scare tactic. That’s basic math.
This week, I will meet my constitutional obligation to present a balanced budget, one that will show more than $1 billion in state general fund cuts on top of the nearly $600 million in such cuts I have made since becoming governor. Factoring in federal matching funds, the cuts will exceed $2.8 billion.
To be clear, it will not be a budget that I support or want to implement. The cuts are too severe. But, with the temporary revenues set to end and members of the House refusing to negotiate on how to avoid the cliff, there are no other options. This budget represents the will of those legislators who are refusing to compromise. By consistently saying no and being reactive rather than proactive, they have put the future of our citizens, hospitals, communities, schools, businesses and state in jeopardy.
The comprehensive plan I proposed in 2017 to avoid the fiscal cliff (www.gov.la.gov/planofaction) contains options that we have all seen before. It is based on recommendations from a bipartisan task force created by the Legislature. I am giving the Legislature its own plan.
I am simply asking for a dollar-for-dollar replacement of the revenue we will lose to continue the progress we have made. Just look at how far we have come since 2016. Unemployment is at its lowest point, 4.7 percent, since May 2008, and for the first time in a decade, we have stabilized funding for higher education. In return, our flagship university, LSU, is seeing a 28 percent increase in admission requests from in-state students, and new businesses are looking to Louisiana to expand. In 2017, we announced that DXC Technology will open in New Orleans, the largest economic development project in our state’s history and one which brings with it 2,000 permanent direct jobs. Business Facilities magazine recently named it the second best economic development deal in the country for 2017. DXC based its decision to invest here largely because of our commitment to higher education and workforce development. This is the key to future investments and job creation as well.
If the Legislature refuses to work collaboratively to fix this problem before March, there will be dire consequences. For example, our state is currently on a negative outlook by two credit rating agencies and in danger of being downgraded once again. This will mean it costs more to service our debt. Others are taking our budget problems seriously, and the Legislature should do the same. We must put Louisiana first.
We can solve this problem, but it requires House leadership to keep its word and offer a plan of action. The speaker of the House and I agree, Louisiana cannot wait. As students decide which colleges to attend, their families need to know what will happen with higher education and TOPS. Long-term planning for major road projects will come to a screeching halt. Our stable and improving economy will lose momentum if the Legislature does not step up, and we will go backward.
My commitment is to remain flexible and work with the Legislature. But lawmakers must be willing to work with me. They can’t continue to say no to every proposed solution and refuse to offer their own solution. Within recent months, I have held more than 30 meetings with hundreds of business owners, local government leaders and Louisianans across the state explaining the “fiscal cliff,” answering their questions and listening to their concerns and ideas for addressing our problems. They are weary of our recurring financial problems and want us to we roll up our sleeves and work together to solve this once and for all. I know that we can. Let’s make the most of this opportunity to make Louisiana better for everyone.
John Bel Edwards is governor of Louisiana.
