Budget needs major overhaul

BATON ROUGE — The $27 billion state budget approved Monday by the House Appropriations Committee completely ignores the realities of what has happened to state finances since Gov. John Bel Edwards took office in January of 2016.

Edwards inherited a $2 billion budget deficit and legislators in two early 2016 special sessions passed $1.4 billion in temporary tax measures that are expiring June 30. An early special session this year failed miserably at raising revenues to replace any portion of that $1.4 billion.

Republicans who control both houses of the Legislature helped approve those temporary taxes. However, as they have done for too many years, they keep talking about the financial situation being better in the future.

Revenues have improved some, but not nearly enough to replace those temporary taxes needed to help state government meet the pressing health care and other needs of one-third of Louisiana’s population, 800,000 of them children.

Edwards said $994 million would be sufficient to replace the $1.4 billion approved in 2016, a major concession. The Revenue Estimating Conference lowered that to some $648 million because of revenues expected from the tax cut bill approved by Congress.

House Bill 1, the state spending bill approved Monday, cuts the state budget by that amount. Hardest hit are the state’s health care services that are eligible for federal matching funds. Jay Dardenne, state commissioner of administration, said those cuts alone would cause the loss of $1.9 billion in federal funds.

The vote was 17-6 with only one Republican of the 19 on the 27-member committee voting against. Democrats have only 7 members on the committee and should have 11 based on the political party makeup of the House. The lone independent on the committee votes with the GOP most of the time.

How bad is this budget?

The two chancellors at the state’s largest medical schools at New Orleans and Shreveport said the loss of those funds would ravage graduate medical education. The publicprivate hospitals that took over the charity hospital system would have to reduce health care services or even end their agreements with the state.

State funding for higher education that was almost wiped out during the Gov. Bobby Jindal years finally stopped. However, Republicans on the Appropriations Committee voted to cut higher education by $22 million while voting to totally fund the TOPS scholarship program at a cost of nearly $300 million.

Reps. Cameron Henry, R-Metairie and chairman of the Appropriations Committee, and Lance Harris, R-Alexandria and chairman of the House Republican Delegation, believe the cuts aren’t devastating. They are opposed to erasing that $640 million cut with new revenues, which is less than 50 percent of the revenues Republicans supported in 2016.

Rep. Walt Leger, D-New Orleans and the No. 2 leader in the House, said amendments proposed by Democrats on the Appropriations Committee had a balanced approach, but they didn’t make it. Democratic Party leaders said Wednesday they are ready to compromise on finding a better budget solution, but they haven’t been asked.

“We reached out our hand, but there was no hand to grab,” Leger said.

The budget will get a full airing in the House today and what happens is pretty much anyone’s guess.

Leger said this budget shortfall is a self-inflicted problem because legislators approved those temporary taxes in 2016 and Republican leaders who helped pass them aren’t willing to replace even half of those funds.

Despite the belief held by Republican hard-liners and many taxpayers that Louisiana citizens are overtaxed, the reality is only four other states have taxes lower than Louisiana’s — Tennessee, South Dakota, Wyoming and Alaska.

USA Today in February reported on the states with the highest and lowest taxes. Louisiana taxes represent 7.6 percent of income.

The per capita income in Louisiana is $42,298, 13th lowest in the country. Income tax collections per capita are $639, 12th lowest. Property taxes per capita are $839, 8th lowest; and general sales tax collections per capita are $627, 12th lowest.

New Yorkers pay the highest taxes, 12.7 percent of their net income per capita ($59,563).

The proposed state budget is a disaster that doesn’t have to happen. Edwards was right when he said it’s “not worth the paper it’s printed on” and “gives nothing but false hope to students and parents.”

The state Senate nearly every year has had to straighten out the proposed budget it gets from the House. At this point no one is sure a budget will even get to the upper chamber.

One Democratic Party legislative leader said, “The proposed budget doesn’t reflect the values we hold dear. It favors big business over the elderly, sick and disabled.”

Yes, it’s that bad, and Republican leaders in the House who created this mess should clean it up. However, don’t hold your breath waiting for it to happen.

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Jim Beam, the retired editor of the American Press, has covered people and politics for more than five decades. Contact him at 337-515-8871 or jbeam@americanpress.com.