What will a penny do? In Louisiana, it’s the difference between shutting down or curtailing state services and keeping them open.
This week the Louisiana legislature passed a state budget that is balanced but has already prompted an extra session because it won’t work.
At issue is tax revenues and politics.
The state is facing a massive income shortfall next year when a $1.4 billion temporary sales tax runs out on June 30. Rather than renew the tax permanently or at least for another year or two, the state’s Republican majority opted not to renew the temporary tax and killed the idea back in February of this year.
Their thinking reflects a party line of fewer taxes and less public dependence on government for assistance.
Without the revenue from that temporary penny, state lawmakers are hard pressed to balance the state budget.
There are only two ways to balance the budget: raise more taxes or cut operating expenses. The Republican majority stands solidly against raising more revenue or even maintaining the temporary tax that’s on the books now. That leaves cutting state services.
The house budget bill went to the chopping block and maintained all essential services: law enforcement, government agencies, colleges and TOPs. It chose to slice state support for seniors whose families could afford to foot the bill for assisted living. The numbers varied, but about 37,000 are in such facilities, but not all 37,000 would have been impacted.
Governor John Bell Edwards pushed the panic button. He sent out letters to the public announcing the possibility of closure of assisted living facilities by July 1. His idea was to rally the public to press their legislators not to balance the budget on the backs of the elderly. (He says that wasn’t the reason).
The plan worked. Legislators were bombarded with calls from their constituents not to put the elderly on the streets. This week the Senate backtracked and instead of stripping the nursing homes they passed a budget that stripped every state agency by 24.2 percent.
That’s big. It means about 2000 state jobs would be eliminated, $96 million would be cut from colleges and universities, and TOPs would be cut by 30 percent.
That means fewer state police officers, fewer course offerings at universities, longer drives to renew a driver’s license, long waits for tax help and cuts everywhere. It’s draconian.
What’s maddening about the whole idea is that if the present penny tax is simply renewed, not only would the budget balance, but it would produce an $800 million surplus.
The Republican-led legislature says a sales tax, of any amount, is regressive. They quote studies from the Economic Research Center that say cutting the tax in half would cost 2800 jobs. Keeping just .25 percent of the penny would cost 1400 jobs.
Of course, they are missing the whole point. Assuming that their data is correct, the jobs that would be lost by implementing the tax have already been lost. We can live with it. If the full tax is renewed no new jobs would be lost; we’d keep what we have now with an extra $800 million in the bank.
That’s where politics comes in. The Republican party wants to align itself with the national party’s agenda of fewer taxes and less government.
They are in control of the legislature.
They want to give back the penny and say they cut taxes. They want to do it by cutting state agencies and colleges so much that they can hardly function.
We say, keep the whole penny, or least half of it, and keep the state’s ship afloat.