Many problems and not enough money
In razor-like fashion, the state House of Representatives overwhelmingly approved legislation last week authorizing a one-cent hike in the state sales tax.
The new penny tax is the focal point of Gov. John Bel Edwards’ efforts to shore up deficits that he says total more than $900 million in the current fiscal year and another $2 billion in the fiscal year that begins July 1.
Attention turned to the Senate over the weekend where on Sunday the Senate Revenue and Fiscal Affairs Committee catapulted Monroe Rep. Katrina Jackson’s bill to the Senate floor with only one committee member expressing opposition to the measure. You can thank Sen. Neil Riser of Columbia for speaking up against the tax and for logging the only vote against it in committee.
But before the Revenue and Fiscal Affairs Committee sent Jackson’s bill to the floor, the committee’s chairman, Sen. J.P. Morrell of New Orleans, amended the legislation to extend the life of the tax from 18 months to five years. The 18-month sunset was necessary early on to get House Republicans to go along with a tax hike.
Morrell obviously saw things differently. He said levying the new penny tax for just 18 months was problematic because revenues generated by it would be considered one-time monies, which couldn’t be appropriated to pay for ongoing state expenses.
We’ve been relying on one-time revenues to pay for continuous expenses for years in Louisiana. Can’t imagine why it’s a problem now.
That’s neither here nor there.
Estimated to generate more than $200 million by June 30 as well as some $900 million in the 2016-2017 fiscal year, the penny tax won’t give lawmakers enough money to erase the red ink that everyone, including the culprits who helped create it, are conveniently blaming on former Gov. Bobby Jindal. Funny how we heard so few complaints last year and the year before that and the year before that about budget deficits eventually coming home to roost. That’s neither here nor there, too.
Simply put, lawmakers must find other sources of revenue as well as employ some cuts in state spending to balance the budget, or budgets, heading into the regular session, which begins at noon on March 14. That’s where the roughly $200 million from the state’s Rainy Day Fund and another $200 million from the settlement over the Deepwater Horizon catastrophe with the BP oil company come into play.
And that’s still not enough revenue to even balance the budget before the current fiscal year comes to an end.
Now most likely headed to a conference committee comprised of members of the House and Senate to iron out their differences, Jackson’s bill to raise the state sales tax by one cent will get a thorough vetting. In all likelihood, every exclusion and/or exemption that was authorized to get the bill out of the House will go away.
Then there are the other four cents of the state sales tax. They’re in play, too, meaning lawmakers will be tasked to revisit every exemption and every exclusion that the business community and individuals currently enjoy whether they recognize it or not.
Hanging in the balance are the additional cuts in state spending, which LSU President F. King Alexander reminded us of on Monday when he spoke to the Press Club in Baton Rouge. Alexander reiterated his threat that the LSU football program could be negatively impacted this fall if lawmakers force the higher education community to make do with less money. Specifically, Alexander said, LSU would entertain cancelling summer school if more cuts in state funding sink in, and if there’s no summer school, some student-athletes won’t be eligible in the fall because they couldn’t get the courses they needed over the summer.
Sounds to me like some young men and young women need to hit the books to avoid summer school altogether.
But that’s neither here nor there as well.
Any way you analyze it, lawmakers have a lot of work left to do and the avenues to accomplish it are narrow in scope.
Sam Hanna is a state political writer.