As Session heads to Midpoint

With the 2017 legislative session reaching the halfway point, the House of Representatives has sent a budget to the Senate that is sure to get a lot of scrutiny, if not outright revision.

In doing so the House chose not to appropriate the full amount of available revenues, voting instead to budget only 97.5-percent of what they could. The primary rationale was to budget lower on the front end and keep revenues in reserve in the event of the usual mid-year budget cut on the back end.

At the same time they managed to fully-fund the TOPS scholarship program this year and avoid any new cuts to higher education beyond the ones the governor put in his executive budget. Both of those things were high priorities for a number of legislators. But the rub will be how they went about doing all of that.

For the most part, they moved funds from the Louisiana Department of Health which said goodbye to well over $200 million that the governor had proposed for them. The full impact of that reduction hasn’t been laid out, but it will be center stage when hearings on the bill begin in the Senate next week.

What was disconcerting to some is that after all the scrutiny House budget leaders have given to that document over the years, they don’t seem to have identified any major items or programs that they specifically want to cut. They haven’t made strategic budget decisions or directed with any precision where to make the cuts. They mostly delineate areas not to cut and then tell the Commissioner of Administration to go find the money, usually out of the budgets of health care and higher education.

It’s an odd combination of micromanaging on one end and hands off on the other. For those who might think it’s partisan politics between a Republican House and a Democrat governor, it should be noted that this has been going on for years. What would be more helpful would be for legislators to identify some things that they don’t want to spend money on anymore – perhaps find some programs or services that they don’t like or are not productive and quit funding them. But not much of that has happened over the years and nor is it likely to. But it’s things like that that actually save the state money on a recurring basis.

In the meantime, the revenue question will be in the spotlight next week when the House Ways & Means Committee begins to consider which of a host of tax bills to send to the House floor. While the bills filed and the initial hearings on them have been very public, the plan, if there is one, on what to do with them has been shrouded in mystery.

But two concerns are driving a significant number of lawmakers: 1) the fiscal cliff that is looming next year when about $1.3 billion in temporary taxes expire, and 2) the desire to go beyond simply renewing those temporary taxes and make a deliberate effort to fix what has become a significantly flawed tax structure. The bills are there to do both. What’s not clear is if there’s a real plan to improve Louisiana’s tax structure this go around, or even the political will to try.

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