A 30-minute reprieve
Just as he promised, Gov. John Bel Edwards’ call for a special legislative session in June includes a number of proposals to raise taxes to shore up the fiscal year budget that begins July 1.
The most glaring items on Edwards’ plate would have the Legislature adjust state income tax brackets to force more Louisianians to pay higher taxes as well as some tinkering with the state income tax code to reduce the amount of money taxpayers can claim in excess itemized deductions. Both proposals, according to those in the know, are dead on arrival in the more conservative House of Representatives. We shall see.
There’s a backup plan in order for Edwards to put his hands on more money instead of unleashing cuts in state spending for popular programs such as health care services for the disadvantaged and disabled and the Taylor Opportunity Program for Students (TOPS). The latter, as you may have noticed, has evolved into somewhat of an entitlement program for the middle class and the upper-middle class, according to TOPS’ detractors and like-minded liberals in the press.
Edwards’ fallback position entails additional curtailing of certain tax credits for the business community. Without a doubt, the governor included it in the call because he knows lawmakers would be more inclined to scale back the so-called welfare for the wealthy in lieu of raising taxes on the average Joe. After all, the Legislature pulled back some tax credits and rebates for the business community in last year’s regular session. Why not do it again if there’s a pile of money to be had?
The work order for the special session included other proposals such as some house cleaning spilling over from the first special session of the year. There’s also some dribble in it about interest paid on tax overpayments and the tax deduction related net capital gains and others. All of them, except for some of the issues related to the first special session, are aimed at ginning up more money for state government to spend.
Perhaps it was Sen. Eric LaFleur of Ville Platte who signaled this week that Edwards recognizes it would be impossible to convince the Legislature to go along with raising some $600 million in new taxes in the special session, which represents the amount of money the Edwards administration says is needed to hold state spending at its current level.
In committee in the Senate earlier this week, LaFleur indicated Edwards pledged to commit one-third of any new revenues generated in June’s special session to TOPS. Since funding for TOPS for the fiscal year that begins July 1 is some $150 million short in light of additional cuts to TOPS in the Senate, one would be within reason to suggest Edwards would settle for roughly $450 million in new tax revenues since one-third of $450 million is the roughly $150 million needed to make TOPS whole.
And perhaps that’s a sign Sen. Neil Riser of Columbia was dead on last week when he said there’s $300 million to $350 million on the horizon that the Revenue Estimating Conference has yet to recognize for the 2016-2017 fiscal year, or the fiscal year that begins in about a month. Riser’s figures, ironically, arise from revenues the state will collect in the new fiscal year thanks to the Legislature’s meddling with tax credits and rebates for the business community in last year’s regular session. Those dollars, according to Riser, weren’t available for the current fiscal year because businesses had already claimed the credits before the law changed.
Regardless of the shell game the Edwards administration is playing with the budget, if history’s told us anything, it’s told us anything’s possible when the Legislature meets including learning the truth about how much money the state actually needs to fully fund the new fiscal year budget.
Lawmakers, though, had something to look forward to. They got a 30-minute vacation between the close of the regular session and opening of the special session. In other words, they had 30 minutes to think long and hard about raising taxes a second time in six months.
Sam Hanna is a state