Friday, June 21, 2024

Governor: Lack of urgency from the House on fiscal cliff

by BIZ. Staff

But he’s [Barras] hopeful enough lawmakers will be on board with tax proposals to have the special session before the March start of the regular session…Waiting until after the regular session ends in June, Barras said, would “put ourselves at a huge disadvantage.” “You’d leave 20 agencies hanging until a week before the fiscal year begins. I think there’s a better way to do that,” he said.

Barras said conversations with House members are covering a wide array of tax types, along with the state’s multibillion-dollar tax break programs. “I think you’ll see that skinny up into probably a little bit more — by process of elimination — the 10, 12, 15 items that we think possibly make up the menu that could close that fiscal cliff,” he said. [Associated Press, September 13, 2017]

That was only four months ago.  Now, it appears House leadership is once again banking on kicking the can down the road.  This time, however, at the end of that road is a steep cliff.

For nearly two years, legislators have known that a “fiscal cliff,” the point at which temporary revenue would expire, was on the horizon.  The cliff is a result of the legislature approving short-term revenue measures without passing long-term reforms that provide stability and predictability to the state. After six legislative sessions, no real reform measure has made its way to the governor’s desk.  As Gov. Edwards says, “you shouldn’t have to dangle your toes off the cliff to know it’s there.”

In 2016, the legislature created a bipartisan task force of elected officials, community and business leaders, and economists who set out to study the state’s budget practices and tax structure.  Over the course of the year, the task force spent more than 120 hours examining the state’s finances before submitting a list of reasonable and responsible recommendations to the legislature.

After traveling the state from the summer of 2017 through the fall of 2017, Gov. Edwards submitted a detailed plan to address the fiscal cliff that mirrored the recommendations of this bipartisan task force. The release of the plan was meant to jumpstart negotiations with House members who routinely stand in the way of real reform.  Despite having spent the months following the 2017 legislative sessions engaged in their own closed door meetings around the state and publicly stating they would engage in this process, House members still have not put forth a plan of their own. With the deadline to call a special session quickly approaching and House members seemingly only interested in playing politics, the people of Louisiana should demand answers to important questions such as:

  • How do House Republicans propose we do to avoid the fiscal cliff?
  • If they aren’t satisfied with Gov. Edwards’ plan, will they submit a plan of their own?
  • Without action from the legislature, $1 billion of the state’s $3 billion in discretionary spending will have to be cut before July 1, 2018. Are the people of Louisiana to assume that, given the lack of alternative plan offered to avoid the fiscal cliff, the House Republican plan is to have us go over the cliff? If so, what specific cuts are these House members willing to impose on the people of Louisiana if they will not replace the revenue we’re losing?

Look how far we’ve come since the first special session in 2016, when the governor and lawmakers grappled with a $2 billion shortfall left over from the previous administration:

  • Unemployment is at 4.7% – its lowest point since May 2008
  • Higher education avoided being cut for the first time in a decade, and more importantly, we’re seeing dramatic increases in the number admissions requests for our universities and technical colleges for next fall.
  • The last fiscal year ended with a budget surplus of more than $120 million, and for the first time in at least eight years, the state has not faced any mid-year budget cuts.

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