2016 Regular Session: Saying Goodbye to Fantasy Budgets

Many words could be used to describe the just-completed regular session of the Legislature. Unfinished. Incomplete. Unresolved.

Many words could be used to describe the just-completed regular session of the Legislature. Unfinished. Incomplete. Unresolved. But whatever you want to call it, it was an important session for the Legislature, particularly with regard to the budget.

Over the course of the last three months, it revealed something critical for all of us to understand – that there is a very real gap between the expenditures lawmakers believe are important that we make as a state and the revenues available to cover the cost.

And despite all the talk about cutting the budget to align our expenditures with our revenues, not even the strongest fiscal conservatives could find a way to pass a budget without making significant cuts to two big-ticket items that everyone wanted to protect – health care and TOPS.

For the public that should tell us something we all need to know. For the last several years the state has been operating off of fantasy budgets that didn’t reflect our true fiscal situation. The new budget is ugly and ultimately unrealistic, but it’s not a fantasy. It’s a reality check that more clearly defines the gap between what the Legislature believes are the true needs of the state and the revenues available to fund them.

Can cuts be made to other areas of the budget? Certainly, and they no doubt will. But what this session tells us is that a Legislature that had just raised more than a billion dollars in new taxes and had every motivation imaginable to pass a budget that would avoid the need to raise any additional revenues, couldn’t do it. Or at least they couldn’t do it in a way that a majority of legislators deemed acceptable.

So what’s next? A second special session is now underway and more than likely lawmakers will raise some amount of additional revenue.

And then, that will be it. Whatever they come to, that will be our new baseline and the state will have to live within those means. It won’t be the end of our tax debate, however.

Keep in mind, just about every new tax the Legislature has passed is temporary and almost all will go away sometime within the next two years. On top of that, we have made our sales tax rate so high and so confusing to businesses that we have no choice but to find some way to fix that on a more permanent basis.

That means next year’s legislative session shouldn’t be about balancing the budget, but repairing a now badly-broken tax structure. That in itself will be another daunting task, but one that is critically important.

If there’s any silver lining to the budget debacle that has consumed Louisiana for most of the last decade, it could be that we will finally get our fiscal house in order. From where we stand today, that still looks like a tall order, but one we have no choice but to undertake.

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