With the 2017 legislative session and all its turmoil behind us, it is fair, yet unfortunate, to say Louisiana missed an opportunity to turn an important corner and move our state forward. For close to a decade Louisiana has been battling a structural budget deficit which has led to three credit downgrades, deep reductions in both higher education and the programs that train our future workforce, and declines in state rankings. All of these reflect how negatively our economy is perceived.
Annual midyear deficits, a reliance upon haphazard cuts to government services, and arbitrary reductions in those programs that facilitate our growth, have created an environment which projects instability and uncertainty to our existing business community and to businesses considering our state for new investment and jobs.
The 2017 legislative session was supposed to be the session where we stood up, said enough is enough, and took the necessary steps to address our chronic fiscal problems with comprehensive and permanent solutions. Sadly, that didn’t happen, although many bills were filed toward that goal.
Today we have more than a billion dollars in temporary taxes, a fiscal cliff that is looming next year, the highest combined state and local sales tax rates in the country, and – despite our low income and property tax burden – a business climate that has been on the decline, with net job losses that further erode our tax base.
Both the Committee of 100 and the Council for A Better Louisiana have been longtime advocates of comprehensive fiscal reforms. We served on the HCR11 Task Force, the blue ribbon non-partisan group established by the Legislature in 2016, and as part of that effort recommended a number of structural solutions to improve our budget and tax policy.
A central theme in the HCR11 recommendations is the streamlining of Louisiana’s tax code to make it simpler and more responsive to our state’s needs and ultimately more stable, predictable and equitable, by broadening the tax base and lowering the tax rates across personal, corporate, and sales tax categories.
This was a comprehensive approach that C100 and CABL, joined by other policy and good government groups, endorsed and advocated for throughout the legislative session. Unfortunately, the Legislature as a whole was not supportive of this effort and opted instead to shelve most reform measures for another day.
As disappointing as this session was for fiscal reform, we hope to have another opportunity to get it right before the temporary taxes expire next year. It is our hope that lawmakers will reflect on this lackluster session, consider the substantial future damage we can avoid, and return in a special session with firm plans to address our fiscal woes in a responsible and comprehensive fashion that positions Louisiana for a more prosperous future.
Other states have done so; Louisiana must find the political will to do the same!
Michael J. Olivier
CEO, Committee of 100 for Economic Development
President, Council for A Better Louisiana