On Monday morning, Bob Mann and I discussed the past fiscal special session of the legislature that ended last week and his expectations for the upcoming session, starting today.
In the initial part of the interview, Mann and I talked about the uncertainties from that fiscal legislative session that closed last week. Mann said he thought the budget gap was perhaps wider than previously reported and if so, the question would be, how much and which sector would be hit the most with cuts. It turns out, as of today, Governor Edwards, in his speech to the legislature, said that the state still does not know the accurate numbers of the budget from last session.
Mann agreed with columnist Clancy Dubos that perhaps Governor John Bel Edwards had made some tactical errors in mentioning shutting down football this fall and for criticizing the House leadership, during the session.
Mann lashed out at conservative “talking points” that cuts would be easy to be made, and asked why they were not made during the just-ended session.
I played a short video clip of the interview I had conducted with Stephen Waguespack, President and CEO of the Louisiana Association of Business and Industry, and a high-official in the Jindal administration. Mann questioned Waguespack’s credibility, his right to give advice and blamed the members of the organization for now seeking solutions and only fighting for themselves. He noted that the business community had received substantial tax credits and exemptions under Jindal.
Last, Mann and I discussed a recent interview with Jon Moller of the Louisiana Budget Project, who criticized the increase of sales tax increase and who advocated future income tax increases. Mann agreed with Moller that sales taxes were hurtful to the lower and middle class, regressive and that other ideas had to be considered instead.
Below is a rough summary and extracts from the interview. It is highly advisable that readers watch the video and at the minimum scroll to the time segment in the video to watch the relevant section.
Beginning at :43 of the interview, Mann bemoaned the fact that the legislature did not close the budget deficit for this year, nor the deficit starting July 1, 2016. He said there was so much confusion on the last day, legislators not reading the bills, at first the estimate for the deficit was at a $30 million shortfall but now, according to the governor’s Secretary of Health and Hospitals, the budget gap existing this year might be as high as $70 million dollars which, if there is a deficit, there won’t be enough time to fix it between the end of this year’s session and the July 1 date.
2:06 I mentioned to him that Clancy Dubos in his usual column following legislative session did not find any “winnas” and even considered Governor Edwards as a loosa”, in part because the Governor mentioned University football being at risk (when trying to explain the budget problem last month) and because there were reports he stoked anger against him by the GOP legislators by criticizing them. Mann said Clancy might be right and that the better choice might have been to focus upon the risks concerning the healthcare system failing and the private sector hospitals walking away from the private-public partnership due to the lack of payment.
3:45 Although it looks like the hospitals involved in the public-private partnerships will receive payment to fund their part of the contract, given the uncertainty of the current shortfall for this year’s budget, it is possible that the private partnership is in jeopardy
5:32 Gov. Edwards is going to be talking today and the opening of the new session and assuming that he's gonna be talking about what happened last session, this session will probably be talking about fixing government with 800-million-dollar-shortfall. This session, the legislature will be focused upon cuts and making long-term corrections, and that's there’s already bills to look at dedicated of funds, consolidating boards of higher education. Mann said that if anything comes out of session it would be a strong push for fiscal sanity and ending the abuses of the last eight years He said it should be harder for the governor to use one-time money and putting us on of path of fiscal responsibility. Since the legislature cannot raise money this session, they will be looking for cuts and reforms, this spring session.
7:53 Mann discussed the deficiencies towards fixing the budget coming from the conservatives in the state. He disagrees with what he calls the “mantra that we don't have a revenue problem, we have a spending problem and that we can't tax ourselves out of this deficit”
Mann complained that nobody has come up with a credible list of acceptable cuts that would have substantially closed the shortfall, if that list existed, the legislature would have taken advantage of it during the past legislative session. Mann said, “if there's a department of Waste Fraud and Abuse in government, nobody has discovered it yet. Mann said people have a short-term memory loss with the cutting for the last eight years under Governor Bobby Jindal, which the former Governor has been bragging about, and that the House Appropriations Committee were only able to come up with limited cuts which included the attempt to cut $43 million in k-12 Education, then, when that failed, to defund the education department and then even cutting the National Guard which would be disastrous given the flooding of this past week. The columnist said they should not be taken with credibility if they don’t come up with specifics.
10.58 I told Mann that I had just interviewed Stephen Waguespack, the President and CEO of the Louisiana Association of Business and Industry and played a short snippet of the interview for him to watch (watch the snippet). Mann’s harshest criticism was directed to Waguespack who Mann said was the architect of the crises under Governor Bobby Jindal (Waguespack had been a high-ranking official within the Jindal administration).
Mann said that Waguespack is the only person who has less credibility in fixing the problem than Jindal. He asked whether the LABI President would also recommend ending the fees for the funds that the dedicated sources poured into. He questioned how much of the dedicated funds still had money since he said the Jindal administration had used much the funds to balance the budget under Jindal. Mann said, “So I cannot think about anybody because less credibility to talk about these issues.”
I responded by playing “devils advocate”, stating that Waguespack said the governor had a very limited call during the special session, preventing the legislature from cutting where it felt it needed to be cut but now that the regular session is starting, the cuts could be made. I also pointed out that Waguespack indicated that revenues might be looked at once sufficient cuts were made. Mann said that “shared sacrifice” is not in their vocabulary, that they “fought tooth and nail” on everything related to their industry and businesses at a time that corporations in this state were getting a windfall for tax credits and exemptions for the last eight years
17:20 I mentioned to Mann that Jan Moller of the Louisiana Budget Project pointed to the income tax increase as the most viable way to raise revenues since, arguably, the sales tax increases have “maxed out” after last session’s one-penny increase. Mann said he advocates bringing back the Stelly Plan, which raised taxes on middle and upper income taxpayers. That plan had been repealed during the latter days of the Blanco administration and the early year of Governor Bobby Jindal. Mann said that sales taxes are regressive, that income tax reflects growth in the economy, and that nobody should defend the hurtful aspects of sales taxes.