By Stephen Winham (Guest Column)
A question no mainstream media reporter has apparently considered serious enough to ask is a very simple, albeit long, one:
How did we enter the regular session with a proposal by the Governor that made the clear statement that we needed another $440 million in revenue to balance the budget for the coming year, provide full funding for TOPS, give state employees a pay raise and provide minimum funding for departments (among other things), yet wind up with NO new revenue, TOPS fully funded, pay raises for employees, and with everybody, including the governor, claiming the budget is okay and they are happy with it?
Think about it. That makes no sense. How can you go from needing $440 million for an adequate budget to needing ZERO? When we see this kind of thing we have no choice but to question the entire budget, including the size of the “fiscal cliff” projected for FY2018-19 and beyond. Credibility needs to be restored to the budget process before people are going to believe anything they are told about it.
For at least 7 of his 8 years in office, Gov. Jindal covered up our structural budget problem using every gimmick to which the legislature would agree. Every year he declared a great victory on the budget and every year the gap remained or, worse, got larger. He inherited an almost $1 billion surplus from the Blanco administration and left Edwards with a $1 billion hole – a turnaround of minus $2 billion if my second-grade math still works.
Rather than relying on such gimmicks, Gov. Edwards has returned to the tried-and-untrue plan of using scare tactics to frighten the people and the legislature into balancing the budget via increased revenue alone. This is an old game and one Louisiana’s citizens grew sick of long ago. How many times were we told, “We are approaching a big fiscal wall and we must do something or we will surely perish when we hit it!” How many times did the wall move? This tactic only worked once in the JBE administration and the temporary “solution” enacted is set to disappear in about 12 months. Now the wall has become a cliff from which we will fall to our fiscal death in the absence of a solution.
Re-read the simple question at the beginning of this column. Do you believe Gov. Edwards presented a realistic and honest budget? Do you believe the legislature enacted a realistic budget? Do you believe cuts were made and, if so, do you know the effects of those cuts?
The inability to definitively answer any of the above questions calls the credibility of the entire budget and budget process into question. I personally believe we have a structural imbalance of at least $1 billion. A “cliff” as large as $1.5 billion is being talked about. Until we all have a better explanation of our current budget, none of us can really know the size of our budget problem, much less how it should be solved.
We pretty much know the revenue options. What we don’t know is precisely what would have to be cut to balance the budget through cuts alone. The last time I can remember anybody really being put on the spot to answer this question was in 2013 when AP reporter Melinda Deslatte asked then commissioner of administration Kristy Nichols why she didn’t recommend cuts instead of patchwork funding in the governor’s budget recommendations. Her response was that cuts would result in “needless reductions to critical services.” While that is not much of an answer, it does offer clues to why we have not seen cuts anybody is willing to permanently stand behind offered up for serious consideration..
Without knowing what really must be cut to balance the budget, the contention that we need no more money by Representatives Henry, Harris, Seabaugh, and others will continue to resonate with a public that wants to believe it.
What I find most incredible is that the Governor apparently does not believe credibility is important. More than once during recent legislative hearings on the budget the Governor’s staff essentially said, “If you don’t like what we have proposed, tell us what you want to cut.” Legislators responded, “It is your job to tell us where to cut.” I agree – But once the governor presents a credible list of cuts, I also agree with his folks.
I apologize for any redundancies between this and my last column, but now that the governor has signed the budget act, I believe the one simple question I ask here is worthy of an extra focus. How can we expect anybody to support taxes if they have no idea what cuts really mean?
—Stephen Winham spent 21 years in the Louisiana State Budget Office, the last 12 as Director. He lives in St. Francisville.
Excellent article explaining and examining the same old same old. Like a broken record the same cycles play again and again. What will it take to stop this deception that sucks the taxpayers dry with lie after lie? It isn’t the “vote” because the votes are rigged in too many instances and proven to have been so. There has to be another way to end this complete fraud on the citizens of this State but who carries a big enough stick to strike first?
It’s a sorry and sad joke! Bring back the Stelly Plan. ….voters approved it and they will do so again. ..this time dedicate funds for specific needs and create a separate account for special needs when they arise. Hank Berchak Terrytown Community activist
My dumb question: Could it be because of changes to the revenue estimate between when the budget process began with JBE’s proposal and the end of the process, due to a higher tax revenue estimate and/ or more federal funds flowing in than expected six months ago?
No. The forecast changed very slightly and, if I remember correctly, actually went down some $20-$25 million.
Thank you. That makes sense as the price of oil continues to drop.
So the implication is that we don’t need to worry only about the fiscal cliff for next FY, but that there will be a mini cliff midway through this FY?
I checked the Official Revenue Forecast on which the enacted budget was based. The overall Taxes, Licenses, and Fees DROPPED by $63.3 million and the net state general fund DROPPED by $27.4 million – again, not really significant drops, but DROPS nonetheless.
Harold: The forecasts above were made in May and are the basis for the balanced budget. However, should the next official forecast drop by any amounts, a mid-year deficit situation will be created as you suggest.
Thanks for clarifying the politicians’ attempts to baffle us with BS. It’s a grim future for young Louisianians.
P. S. We do have to worry about the FY19 fiscal cliff because it exists and is based on expiration of over a billion dollars in temporary taxes that will, by law, expire June 30, 2018. If our “leaders” totally cop out and they are renewed on a permanent basis, we will not only have not done anything to reform our tax system, but will have made it even worse than it was before..
I can hear it now. One minute before the legislative session to approve the fiscal 2019 budget ends the legislature “reluctantly” renews the one cent “temporary” sales tax. Oh it will just break their hearts and disappoint them greatly, but in order to save our Great State from fiscal collapse they will just have to do it. That’s when we need to march on Baton Rouge with pitchforks and bailing hooks at the ready.
Amen, John.
http://wrkf.org/post/budget-101-outgo
http://wrkf.org/post/budget-101-state-income
I highly recommend everyone listen to these podcasts of Sue Lincoln’s “Capitol Access” segments over the past 2 days. She condenses the whole thing in a very understandable way.