Predictably, the business community is in high dudgeon over Gov. John Bel Edwards’ initial proposals to address the fiscal mess left by his predecessor—you know, the guy who thought he was presidential timber.
Judging from the early reaction of his die-hard opponents, including the Louisiana’s Rush Limburger wannabe Jeff (so) Sadow, Edwards is already a major flop just two weeks into the job. As much as I detest Mike Foster’s love child, I gave him nearly four years before abandoning any hope that he had the slightest concern for the people of this state.
Personally, I can’t think of a single person on the face of the good earth who could come into this job and successfully turn the state around in eight years, let alone four. It’s a daunting task that no sane candidate should relish.
In coaching, no one wants to be the one to follow a legend. You want to be the one who follows the one who follows the legend. Well, no one should want to be the one to inherit a disaster. You want to be the one who follows the one who tried to right the ship so if things are looking up, you can ride the momentum and take credit for the recovery.
With that in mind, here are a few observations:
The Baton Rouge Advocate on Sunday ran an outstanding analysis of the undeniable disaster in high education funding left by Jindal. The story was especially timely in light of Edwards’ announcement of even more draconian cuts facing high ed as he tries to cope with $750 million in budget deficits for the current fiscal year and a $1.9 billion budget gap for next fiscal year—all to be covered with shrinking revenues. http://theadvocate.com/news/14621878-123/special-report-how-startling-unique-cuts-have-transformed-louisianas-universities
LSU President F. King Alexander has gone on record as saying summer school may have to be cancelled at LSU. That’s the same type of dire warning as his “financial exigency” threat last year. That worked to get legislators’ attention and warded off the threatened bankruptcy. This threat of the cancellation of summer classes is a similar wakeup call to lawmakers—if they can get their heads from the place where only their proctologists can find them.
Even Jindal’s head cheerleader Rolfe McCollister inexplicably allowed Jeremy Alford to reveal in McCollister’s Baton Rouge Business Report that Edwards learned to his surprise that Piyush had approved millions of dollars in pay raises and made almost two dozen board and commission appointments that were not announced.
As a sign that McCollister may not be paying enough attention to his publication, he also allowed an Associated Press story that said Jindal left Edwards a gaggle of economic development deal IOUs.
But when Edwards suggested a tax package to help meet the fiscal disaster head-on, you’d have though from LABI’s reaction, that he was demanding the first-born of every businessman in the state.
Never mind that the Tax Foundation released a report last week that revealed that Louisiana has the sixth-lowest tax burden in America in the 2012 fiscal year.
While the rest of the country was paying an average of one dollar for every $10 earned in state and local taxes (exclusive of federal taxes), Louisiana citizens were paying only 76 cents for every $10 earned.
The per capita state and local taxes of $2,940 paid is fourth-lowest in the country and the state’s cigarette tax is one of the lowest. Edwards is seeking to increase the 86-cent cigarette tax to $1.08, which would bring Louisiana more in line with other states.
The state’s effective property tax rate of .5 percent is third lowest but the combined state and local sales tax rate (arguably the most regressive tax) of 8.9 percent is third highest.
Edwards says the days of using budget gimmicks are over. “This administration will remove the smoke and mirrors and provide the facts about where we are,” he said, in a not-so-subtle slap at Jindal. http://theadvocate.com/news/14619324-75/gov-john-bel-edwards-outlines-budget-options
State Sen. Jack Donahue, in a rare exhibition of lucidity for a legislator, told The Advocate, “…the proof of the pudding is in the eating, and so what did we spend (state revenue) on? Motion pictures; we spent it on solar power; we spent it on enterprise zone tax credits; we spent it on new market tax credits. We spent millions and millions and millions of dollars on all those things; so obviously, they were more important than our education.” http://theadvocate.com/news/14621878-123/special-report-how-startling-unique-cuts-have-transformed-louisianas-universities
Well, Senator, you said it. And you were oh, so accurate to employ the pronoun “we.” Hindsight, as they say, is 20/20 and yours is flawless. Other than Edwards, Rep. Rogers Pope, and Sens. Ed Murray and Dan Claitor, and maybe a couple others, I can’t recall many objections to the Jindal giveaway years coming from either chamber over the past eight years.
So now, Edwards wants to roll back some those insanely, ill-advised, foolish, thoughtless corporate tax breaks, and the corporate world is already screaming rape. Hey, guys, the honeymoon is—or should be—over. It’s way past time for the middle- and low-income citizens of this state to be relieved of the heaviest tax burdens while you guys get all those tax breaks, exemptions and incentives to create minimum-wage jobs—if jobs are even created at all. I mean, does anyone really think oil and gas will leave Louisiana when the oil and gas is here? To get to it, they have to come here. Do we really need Enterprise Zone credits for Wal-Marts in St. Tammany Parish?
As Edwards said, it’s time for the governor’s office to be “not business as usual.”
He will make mistakes. He will do things I don’t agree with. I was never under the illusion that I would agree with every single action he takes. No politician, like a rooster in a henhouse, could ever please everyone all the time.
And when he does displease me, I will say so. But for now, I’m more than willing to at least let him get his feet wet. We all owe him that much.
Louisiana Voice 
Where can I find a list of businesses that belong to this LABI group. I noticed last election that they gave my Republican Representative an “A” while some other Republicans got “D” or “F”. It was easy to see that he voted for EVERY thing they wanted. Look where this has gotten us. I want to know who these business people are that whine and rant when asked to pay their fair share. I also believe that a business that is well run, need not fear being hurt by paying a living wage to employees and fair share taxes. We, as citizens and customers need to let them know their lobbying for continued welfare is unacceptable!.
Edith,
If we were to ’round up the usual suspects’, among them we would find the FIRE sector well represented. That would be Finance, Insurance and Real Estate. These would probably be the greater sources of advertising revenue for McCollister’s publication and for whom he would most likely lobby in his column.
In fact, Louisiana missed a great opportunity for help in balancing it’s budget by overlooking the bubble producing revenues that quantitative easing produced in this sector. But, since it’s a bubble, these sources of revenue could collapse at any time.
Sadow’s columns have consisted only of weekly vile attacks on Governor John Bel Edwards, coming even before he had been in office. His writing seems sophomoric at best, and he is supposed to be a college professor. I suspect that there is no balance in his teaching just as there is not balance in his columns.
That would be associate professor. After 24 years at LSU-Shreveport, he has yet to attain full professor status.
Joseph I assure you that even his students don’t think much of Sadow.
http://www.ratemyprofessors.com/ShowRatings.jsp?tid=568898
At least I’m spared from reading his comments on the Times-Pic since he got his column or whatever at The Advocate.
LABI probably has a website listing members. I’m also interested in their grades of legislators, ie Neil Abramson.
That would be an incorrect assumption. They do have a web site and you can become a member through the web site but you cannot, as near as I can tell, get a list of the membership. It is after all a private, dues paying club.
George Carlin on The American Dream
“It’s a big club, and you aint in it.”
https://tomhuff.wordpress.com/2011/01/19/george-carlin-its-a-big-club-and-you-aint-in-it/
Early indications are that Governor Edwards is mistakenly, in my opinion, going to rely on increased sales taxes to fund much of the State’s budget shortfall. If so, then he will disappoint those that elected him based on his assurances of fairness. Being already 4th highest in the nation in sales taxes and now increasing the rate and burden to those least able to pay borders on the unconscionable.
And I believe he has stated that he prefers to do that only for one year.
…And the promise of a “temporary tax” ranks right up there with “Of course I’ll respect you in the morning.”
The only sales tax I would support would be an increase in the cigarette tax and possible an increase on wine, beer and liquor but perhaps that’s selfish of me; I don’t smoke and drink only an occasional beer (like maybe two a month). To quote the late Sen. Russell Long: “Don’t tax you and don’t tax me, tax that fellow behind the tree.”
Tom said: The only sales tax I would support would be an increase in the cigarette tax and possible an increase on wine, beer and liquor
Well…I smoke but rarely drink alcohol. And besides which, they just raised the tobacco tax last year. Don’t know if members of the lege will be willing to raise again so soon. I believe the last time they raised the booze tax was back in the 90s maybe?
From La Weekly back in 2013:
“Unconscionable”
Yes! Let us not be at all cavalier about the dire and devastating effects this sales tax increase will have on members of the lower income levels. For some it will mean a reduction in food quality and quantity, a factor in future use of health services. For others, the ability to buy medicines that keep a chronic illness stable. And for some, the ability to keep a roof over their heads, dumping them onto welfare services, on the street, or both. And this in recognition of the general rise in rental prices already stripping them of the little income they have.
In addition, we must look at the effectiveness of this increase to revenues. This can best be judged through the lens of personal discretionary spending, which can be best described as little to none in these income classes. Indeed, they spend every dime they get.The effect will be a further depression of demand and retrenchment resulting in little increase or fewer actual revenues generated.
At the very least these income classes should be issued a card exempting them from this increase and for that matter any sales taxes whatsoever. These are the people that have benefited the least from economic and government policies, so it would be, at the least, a hugely cruel miscarriage of justice for them to shoulder any burden in favor of those who have benefited greatly and who have greater levels of discretionary capital.
In this light, the imposition of increased sales taxes should be temporary only with a view to increasing income taxes on those whose incomes reflect much greater benefits and discretionary leeway. It’s time again for progressive taxation, not tax cuts for the rich.
>the ability to buy medicines that keep a chronic illness stable<
Are you trying to say there will be a tax applied to prescriptions? Because there won't be. As i read things, whatever was already exempt from sales tax, prescriptions, the power bill (?) groceries, will still be exempt from the additional penny. Of course I could have read it wrong.
No, not saying that.
When I voted for JBE, I was not under the illusion that I would like all of his “fixes.” I hoped that he would lay it all out there, and quit the smoke & mirrors, just be honest, but sometimes that comes with a price. I am finding out in my later years, that many do not really like honesty, they prefer having their head in a dark place, that way they don’t have to make the difficult decisions… Louisiana so rich in resources is being looted, not by the SNAP/Medicaid recipient, as conservatives, like Sadow whine about continuously, but by the greedy Walmart types…JBE is in for a battle getting anything meaningful through the Legislature, I wish him well.
I have contacted everyone up to Peter Kovacs about Sadow’s column and I have suggested in a letter to Rolfe McCollister that he hire him at the Greater Baton Rouge Business Report since Mr. McCollister’s columns sometimes read exactly like Sadow’s. Of course, since Mr. McCollister considers The ADVOCATE a liberal newspaper, he has probably never noticed Mr. Sadow’s Sunday columns.
JBE, et al, are in a desperate situation and it is a shame they are resorting to the very tactics they said they would avoid to try to make it to the end of this fiscal year, but we are literally busted and I believe they are doing the best they can at the moment to manage the situation they inherited.
Sales taxes are regressive even with the exemptions and “temporary” solutions are what got us into the current mess.
.Unfortunately, the public has been lied to for so many years, they don’t believe what anybody says about the budget – and they can hardly be blamed. Even today, they can turn on the television and hear directly contradictory things from our own state officials.
For those who say “We don’t have a revenue problem, we have a spending problem” why does NOBODY ever ask them something incredibly simple and reasonable like, “Okay, Mr. Kennedy, give us a list of spending cuts that totals the current gap and the recurring gap. I know we can and should eliminate some professional services contracts, so list them first (by name and amount), then list EXPLICIT additional cuts you would make to bring the budget in line. You surely have such a list, else you would not so confidently state your position.”
The governor and legislature are accountable for solving this problem and it should be put off absolutely no longer than the end of this fiscal year. They may carp, “But that’s not enough time!” Balderdash. You’ve had years and years and study after study to guide you.
If we fool ourselves into adopting any more temporary bridges to the future, we will have proven we are incapable of learning anything.
Amen, hallelujah, damn right and whatever other “yes sir i agree with this” cliche’s one can think of to you Mr. Winham!!!
I agree totally with you du chicot.
We’ll stated Stephen, especially how Kennedy should be held accountable for his broad statements. As far as Sadie is concerned, he’s not worth consideration.
Reblogged this on tmabaker.
As I had read the article about the proposals by Edwards I was under the understanding that he merely was putting all the cards on the table so that it would be easier to see just what was possible. The actual details, to be acted upon by the legislature, were to come later. But blaming Edwards is like blaming the firefighter who comes to save your burning house! Let’s get real here.
@Hugh: I saw this as his bargaining chips. “We’ll start here and see how it goes.”.
Hugh,
The reality is that as long as virtually all public offices throughout the US are bought and sold by corporate money we will be constantly confronted by the conservative agenda. One of the elements of that agenda specific to taxation is the shifting of taxes off the rich and onto the poor further pauperizing them. It doesn’t get any more real than that.
Have you noticed that increased sales taxes were one leg of Jindal’s proposed tax plan? I guarantee you it would have been the first leg of his plan implemented with the elimination of income taxes forgotten about except for the rich. The reduction of taxes for the rich is one of the causes for lost govt. revenues and the situation we’re in. That’s reality.
Jindal reduced taxes on the rich and at the same time gave them huge amounts in the form of tax breaks. It’s almost insurmountable. Because the business “community” will threaten to take their ball (capital and jobs) and go home. It’s going to be a bumpy ride.
…take their ball (capital and jobs) and go home.”
That’s pretty much an empty threat. Why? Because one, they’ll lose the advantage of familiarity of the area, specific business contacts that work mainly here, etc. Two, should they do so, they’ll inevitably leave a vacuum that will be filled by another. If there’s money to be made, someone will make it.
“It’s going to be a bumpy ride.”
Agreed. One of our chief impediments has been the loss of jobs through the trade agreements. We have to somehow put a stop to this. With the jobs go the revenues. The companies that moved for the most part did well, at first. But in doing so, they destroyed their own markets through that same loss of jobs. That along with excess debt killed demand.
AsYouLikeIt…..You sayin Kennedy lying on the threat he put out on this dude on MG show last week at 3:34 mark? https://m.youtube.com/watch?v=kdfKS9A7wDE. Don’t sound like he making a threat to me! Sound like if that inventory tax pass, he gone to Houston!
Joe Biundo from LSU Health during the seventies.
[…] we need more revenue. Simple as that. Bitch and moan too about taxes, but we just saw the biggest tax giveaway in our state’s history and what did it get […]
Really Louisiana!!!
Don’t increase the tobacco tax, go after corporate welfare! Stop hurting the lower and middle class and go after the peeps that make millions!
@Fred Scott
Believe me, it would be a strategic and logistic nightmare. It would be of such magnitude, for a single company, as only occurred during WWII where a guaranteed govt. market existed to support such an endeavor.
You’re talking about heavy industry. They’re a heavily intensive capital equipment industry. You’re looking at major capital equipment expenditures. Capital equipment with 40 year service lifetimes, a lot of which can’t be moved. Try moving all those storage tanks and their foundations. The stranded asset costs alone would be unreal. Pipelines in the Gulf that would have to be retied to those feeding Houston Port facilities, provided they had the capacity, with most having greater distance to Houston as opposed to Louisiana ports. The State of Texas is going to expand it’s port facilities and supporting infrastructure, i.e. tanker docks – etc., to meet the needs of one company in a declining economic and energy environment? The engineering costs would be substantial, which the engineering firms would see as boon never before seen in their lifetime.
I presume you’re speaking of XOM. Now, consider that XOM has been doing stock buybacks at the rate of $5B per quarter, a substantial amount of which is borrowed capital, on net income of slightly under $20B, just to keep their stock price bloated. This means that they have ‘owners’. In fact, their owners (stockholders) have owners (creditors), who are not going to be at all pleased with such an outrageous endeavor. You’ll see their stock price plunge so fast it’ll be like a boat going over Niagra Falls. This, not even mentioning market share loss.
Fine, let’s say they pull it off. The get everything moved, replaced, etc. Once they’re ensconced in their new home with worthless stock, whose to say that Texas won’t recognize them as a captured industry, grow some cahones and do the same thing Louisiana did? Laf! All this just so they don’t have to pay Louisiana taxes amounting to what $1B? Which they’re uselessly feeding to the capital markets anyway and only a portiion of which La. wants to capture?
What a hysterical LAF!
Never fear Kennedy (Vitter) is on his way to protect the taxpayers. Once you drink the Republican cool-aid, you have no legal or moral obligation to the rest of us, Such arrogance. I am confident JBE will do honor as an elected official. ron thompson
I am hearing a lot of negative talk about any increase in taxes. So, what are the alternative sources of revenue? I would really like to hear some other solutions to our problems. Will we ever overhaul the tax code? Not with everyone lobbying against any changes that benefit them. Can we not see that the end is near for this type of financial bumbling about from pillar to post? I am not sure we can cut anymore and remain a solvent state…so, where is the increased revenues hiding?
@Hunycat
“…so, where is the increased revenues hiding?”
Well, I can’t make any claims for the veracity of my sources, but I hear that the rich and dark money Superpacs have lots of money. And of course, there’s always corporate political donations that could probably stand the nick.
John Kennedy, now running for Vitter’s Senate seat, issued the statement reported below today, asserting that the current year gap can be easily closed with no increase in revenue. If JBEs people have good sense, they better respond to this quickly.
Note that the biggest chunk of Kennedy’s solution is a raid of dedicated funds, the difference between this and what Jindal routinely did being he recommends they simply be eliminated. He is light on specifics (knowing full well each of these dedications has a very dedicated constituency), but there is certainly enough here, including his other standard suggestions, to reinforce the convictions of those who believe there is plenty to cut that won’t hurt anybody and could make our politicians more honest in the bargain.
Mr. Dardenne, I suggest you get on this like a duck on a june bug because what Mr. Kennedy is saying is exactly what people want to believe and it is going to take a lot to convince them otherwise.
http://theadvocate.com/news/14696522-93/kennedy-budget-solutions-possible-without-tax-hikes
:
From your linked article –
“…state employee managers oversee an average of four classified state workers…”
The effective management capacity for general managers is sixteen. This is administrative bloat. This is effectively a payoff for political support and for which both parties are guilty. Nice to be able to use the state treasury for political purposes, huh?! Yet they say there’s no more room for cuts. Well, at least not as long as we have the taxpayers to nick for further taxes.
well all those overpaid la officials that only work less than 3 months a year need to go back to the original constitution of la for part time legeslators and be paid as such. way to big incomes are paid to politicins time for them to feel some pain instead of the less advantage people of la! give the people of la there money back and taxes go where they were intended.