COVID-19 and its spread through the country, as well as the state of Louisiana, has brought to light financial scenarios that have caught many by surprise.
For instance, in just two weeks time state government has made two moves with regard to employment that seem counter-intuitive.
First, it was announced that, should the unemployment trust fund drop below a certain value ($100 million) then the state would have to borrow money from the feds and utilize a solvency tax to revitalize the money source.
That announcement was followed by Louisiana Workforce Commission director Ava Dejoie stating that the borrowing had begun, and the tax would come.
Many residents and employers were shocked that such a mechanism existed, in regard to the increased payroll tax. It seemed counter to the situation, wherein if that many were unemployed then adding additional tax to employers would probably expound the situation.
The law is a relic of the Oil Bust, wherein the state had to find a way to replenish the fund when unemployment reached ‘do-or-die’ level.
And that level has been reached, as in March the state started with one of the most solvent unemployment funds in the country at roughly $1.3 billion, and is now borrowing from the fed in the hopes that Congress will provide relief – so that the business tax is unnecessary.
Here’s where things get weird – that’s not the governor’s call, it’s a constitutional mandate.
The same confusion has been applied to a more recent situation – and the second example – wherein $68 million was outlayed for state employee pay raises.
Republican lawmakers squawked at the idea of giving raises to anyone in government during this time, and for good reason – unemployment is at an all-time high and private sector employers are facing the 30% payroll increase.
And yet, once again, the raise was agreed upon by the civil service commission and was – you guessed it – their constitutional right to do so.
Does the governor have some influence on the civil service commission? Absolutely. But whether he does or not is irrelevant when the commission is able to act independently of the will of the legislature – whether that be good or bad.
These are but two examples that come to mind because they are currently on the forefont of conversation during these wild COVID-19 times.
Constitutional conventions have been discussed over and over as something that Louisiana needs in order to re-tool for the future and move forward. One of the main arguments? Depending on who you ask, anywhere from 60-80% of each year’s budget is constitutionally mandated to go to specific places, leaving the governor, Division of Administration, and the legislature but few avenues to negotiate and – in recent years – cut.
The fear has been the influence of special interest groups, lobbying efforts, and misguided politicians gumming up the works.
But moving forward under the umbrella of fear is no longer an option. Dated practices, unfortunate decisions, and ultimately misguided laws continue to affect Louisiana in a negative way.
And if at first you don’t succeed? Try, try again.
McHugh David is publisher of the Livingston Parish News.