Edwards fighting uphill battle

Evidence that conservative Republicans in the Louisiana House are determined to thwart Democratic Gov. John Bel Edwards at every turn became clear with two recent appointments by Speaker Taylor Barras, R-New Iberia. Barras named two of the most anti-tax representatives to the Ways and Means Committee that decides the fate of all tax bills.

Republicans control both houses of the Legislature, but it is in the committees where most proposed bills are killed. The Ways and Means Committee has 21 members, 13 Republicans and 8 Democrats. Chairman Neil Abramson, a New Orleans Democrat, has been pretty much allied with the GOP members since Edwards took office.

Reps. Clay Schexnayder, R-Gonzales, and Alan Seabaugh, R-Shreveport, are the new committee members. Neither lawmaker supports budget and tax reform, the main goal of the upcoming fiscal. Never mind that the best financial brains in the state think it is the only way to straighten out the state’s failing money systems.

Three of the big national rating agencies have downgraded Louisiana’s credit rating in the past 13 months. S&P Global Ratings dropped the state’s AA rating to AA-, which means it has to pay more interest on loans. Fitch Ratings and Moody’s Investor Service hadn’t downgraded Louisiana since 2005 following Hurricanes Katrina and Rita.

State Treasurer Ron Henson said, “The state still has a lot of work to do, and this downgrade is Wall Street’s recognition of Louisiana’s continuing problems.”

The Council for a Better Louisiana said, “Today we have the highest combined sales taxes in the country, tax exemptions almost exceed collections, our tax burden remains among the lowest in the country, but the Tax Foundation says our tax structure is unnecessarily complicated and ranks our business climate among the 10 worst.”

CABL added that higher education has been severely cut, tuition has skyrocketed, TOPS scholarships are no longer fully funded, health care delivery to the poor is threatened, the future of medical schools remains uncertain and there is talk of cutting funding to public schools and corrections.

Among those gloomy forecasts, Schexnayder told The Advocate the tax system needs to be fixed at a constitutional convention, the likes of which are slim to none. Seabaugh simply doesn’t like any Democrats. He told KEEL Radio when a Democrat calls for tax reform, “he means a tax increase.”

Edwards has come up with a new tax proposal that would end the corporate tax on profits and the corporate franchise tax. They would be replaced with a corporate tax on sales like one that exists in Ohio. The proposed tax would also eliminate the many tax breaks corporations received during the administration of Gov. Bobby Jindal, which have almost eliminated corporate taxes.

State Sen. Rick Ward, R-Port Allen, said of the proposed tax, “It’s extremely simple. Your corporate tax return could be done on a simple sheet of paper.”

Reaction to the Edwards proposal is mixed, and many want to know more about how it works. Seabaugh told The Advocate he doesn’t like Edwards’ proposed gross receipts tax idea but is waiting to see the bill.

The truth be told, Seabaugh probably doesn’t believe in taxes of any kind. Like many of his hard-line GOP conservative lawmakers, he doesn’t think the state has a money shortage, but spends too much. He said he expects the governor to “swing for the fences” when it comes to asking for more revenue.

Four states, including Texas, have the corporate tax on sales like the one being proposed by Edwards. Ohio’s is 0.26 percent on all sales.

A 1 percent increase in the state sales tax goes off the books July 1, 2018, and it will take over $880 million to replace it. Edwards wants to apply the sales tax to additional services like cable TV and Internet services, which other states have turned to as consumers buying habits have changed.

Kimberly Robinson, secretary of the state Department of Revenue, said, “We’re trying to achieve a structurally sound tax system that allows us to have the necessary revenue to fund government services. We are broadening our tax base and lowering our rates.”

Another way to do that is to lower individual income tax rates in exchange for citizens giving up their ability to deduct federal income taxes on their state returns. However, voters would have to approve that plan and they have already rejected a similar measure that only affected corporations.

“The governor heard the voters on that,” Robinson said.

Edwards will go into more specifics of what he plans to do next Monday. For Seabaugh and his likeminded colleagues, it really doesn’t make any difference. Their major goal since Edwards first took office has been to try to make him a oneterm governor.

The America Rising Political Action Committee that backs Republicans has launched a concerted effort in that direction.

A spokesman said, “Gov. Edwards is one of the last Democrats standing in the South, and our mission is to highlight his broken campaign promises and liberal record.”

Many have wondered if the political gridlock we’ve seen in recent years in Washington, D.C., would ever make its way to the Louisiana Legislature. It surfaced, unfortunately, the day Edwards took the oath of office.

Like their counterparts in the nation’s capital, conservative Republican legislators who control the House are more worried about the next election than getting Louisiana’s financial house in order.

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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.