On Sunday morning, I sat down with the TheAdvocate.com's Tyler Bridges who cover the three legislative sessions this year ( a special session focused on taxes, non-tax related General Session and the most-recent special session, again, focused on taxes).
We discussed these issues above and more.
Below are a summary overview of the responses. To obtain the exact questions and responses, please watch the video.
TYLER BRIDGES OVERVIEW OF SESSION
So could you give us an idea as to what happened the last three weeks?
Well, the last three weeks was a special session called by Governor Edwards because he said that lawmakers didn't raise enough revenues during the first special session in March, So on June 6th when the second special session started , the governor said that there was a $600 shortfall to fund programs like TOPS, K to 12 schools, prisons, Funding for the sheriff's, higher education and an array of other programs - - so for the past few weeks, the governor was trying to get the legislature to approve that 600 million dollars In funding.
And the end result, what?
In the end, Republicans in the state house were not persuaded that the governor’s ideas were the best, The Legislature did raise some taxes, the amount of appears to be about 263 Million dollars for about one half of what the governor wanted.
I saw an article that you wrote that was on The Advocate yesterday and you mentioned that we are roughly $200 million short for this current fiscal year that ends June 30, Is that correct?
Yes, let me take just a few minutes to walk people through this, it's a little confusing--Right now, we're in the 2015 - 2016 fiscal year that ends on June 30th. And in the current fiscal year, it looks like the states going to come up with about $200 million short - - why? Because corporate taxes are about $200 million below projections. The state was supposed to collect $359 from corporations, It looks like they're going to get about $209 or less. It's not clear why, whether there's too many tax giveaways or the economy is in recession for the lacking tax collections, So that is a problem the legislature doesn't have to deal with right now -- the 200 million dollar deficit. But in July it starts the new fiscal year, so at some point in the new fiscal year, the legislature, if indeed that $200 million dollars is an projection at some point, but if that $200 million dollars comes through that the state is short with a deficit, then the legislature and the governor, by law, have to fill it. The governor was trying to raise 600 million dollars for next year, the legislature and the governor were not required to come up with a 600 million he just said, we need this money for hospitals, for schools for Tops, but at the end, the legislature only provided $263 million. So that meant that certain programs would not be fully funded next year, next year being the fiscal year after July 1st. You've got two different issues that are related. All the programs that the governor wanted to fund, the legislature said we're not going to raise your taxes and separately in the current fiscal year, a $200 million dollar deficit, that at some point, if that is the final number because we don't know yet--it will result in our having to make more cuts or come up with more money, next year.
WE'VE GOT A $200 SHORTAGE FOR CURRENT YEAR, BUT...
Regarding the legislature knowing the final numbers for 2015-2016 budget, they're not going to know the final numbers until September. Republicans in the house are saying the $200 million dollar deficit now existing from this current year’s budget is just a projection at this point-- “Let's wait to the final numbers come in” and they're also hoping that oil prices go up because when oil prices go up put a state, for every $1 increase in a year, the state collects about 12 million dollars in severance taxes. And they're also hoping that other measures passed by the legislature, designed to raise revenues, will actually raise more than projected so, in the end the legislature won't have to act
IS GOVERNOR EDWARDS, THE LOSER?
Who are the big winners this session?
My friend,Clancy Dubos (The Gambit) and his new column said that John Bel Edwards was the biggest loser - - I would judge it a little different, I certainly don't think he was a winner, he could be called a loser, I just think it's a little more nuanced. In the end, the governor wanted to raise about 1.8 billion dollars this year and he was about $300 short. So the state is no longer in a budget crisis but he didn't raise as much money as he wanted. He did not persuade enough Republicans in the House and it could be argued that makes him a political loser.
SO WHO TOOK THE HITS?
So he was roughly about $359 short for this upcoming fiscal year, the public schools took a hit of $24 million, who else took a hit?
The K to 12 schools for the first time in many years will actually see less money next year then the current year, The sheriff's office, the Governor's office, the legislature, the reentry programs for prisoners coming out of prison and--just up and down the line. The TOPS program is going to be fully funded this semester--it looks like, because of what the Republicans in the House did. Unless the governor vetoes the language to spend 100% for this semester and 40% for next semester, and if vetoed by the Governor, it would be 70% for this semester and next semester throughout the year the average student’s would have to put up an extra $1,500 for tuition, each semester, by losing the 30% for TOPS.
The Republicans would say that the taxpayers wound up being the winner, they're not going to pay the tax of the governor wanted it to go up
DID THE REPUBLICANS WIN?
Conservatives are taking credit and saying that they won because they are paying less in taxes?
The business community testified that they would not be hiring as many people or would have to let some people go and the counter argument is that is that when the medical schools get less money there a few residents who will stay in the state, and that costs the state that health care matching Federal money, and when there is less money for education that means less money for teachers and more teachers get laid off and more professors leaving; And, not enough money to fix the roads and things like that so that would be a counter-argument
WHAT ABOUT THAT $2 BILLION SURPLUS?
Regarding the issue that the budget Louisiana this year is two billion dollars more than last year, John Bel Edwards response is that while there is more money, much of the money is from the federal draw down money and that increase is mostly federal dollars and that the state has to pay more money next year for healthcare because Bobby Jindal did not fund all of it due to the bookkeeping tricks that Jindal Administration did to hide the deficit as it was leaving office - - it didn't pay certain bills and pushed those bills onto the new Administration. Much of the increase spending from the $2 billion is not coming from the state general fund but from the federal government
CAN KICKED AGAIN
When Governor Edwards took over the state, it was in really bad shape and now the budget situation has gotten better, there is no budget crisis anymore, and what the Republicans in the house did was “kick the can down the road”. But most of the tax increases that went through are temporary in nature and they're saying what we need is comprehensive tax reform as set up by the task force that will issue its recommendation on September 1st in anticipation of next year where the legislature really does the hard work they chose to take the easy decisions this year. They could have made the hard decisions. Next year is going to be an absolutely key here to reform the tax system and reform is a fungible thing--it could be mean different things to different people. But the legislature set itself up to--basically close tax breaks enjoyed by businesses and individuals that costs a lot of money and a lot of the temporary taxes approved last year and this year fall off the table in 2018, so a lot of the hard decisions are ahead.
TREASURER KENNEDY SAID WE DON'T NEED TO RAISE TAXES
Responding to the issue that that a number of Republicans, in particular, Treasurer John Kennedy, said that we have a lot of money that we don’t have to raise any taxes at all, but in fact, the Louisiana legislature did raise taxes, Bridges said that Republican Commissioner of Administration Jay Dardenne said that John Kennedy's analysis was full of holes. Dardenne is a smart guy, Kennedy deserves credit for raising certain issues but there are people at the Capitol who believe that it is more of a political posturing