Editor’s Note: This column was first published the week of June 25, 2018.
State lawmakers wrapped up the third special session of the year over the weekend but not before signing off on raising nearly $500 million in new taxes. The new .45 percent sales tax hike goes into effect at the start of the new fiscal year, or July 1.
It’s only fitting that we take a quick trip down memory lane to remind ourselves of how we got to the point in which state lawmakers, including an alarming number of Republicans, appeared giddy Sunday evening over raising taxes to prop up the largest budget in the history of Louisiana.
Let us not forget that beginning shortly after the 2017 regular legislative session, Gov. John Bel Edwards started howling about a “fiscal cliff” the state faced at the close of the 2017-2018 fiscal year. Doom and gloom were on the horizon, according to Edwards, since more than $1 billion in so-called “temporary” taxes that the Legislature gleefully approved in 2016 would roll off the books as of June 30. Accordingly, Edwards sought more than $1 billion in tax hikes beginning with the 2018-2019 fiscal year to replace the more than $1 billion in “temporary” taxes that he championed shortly after he took office in January 2016.
Back in February, lawmakers gathered for their first special session of the year to entertain Edwards’ tax-raising proposals. As you will recall, a special session was necessary because the state Constitution prohibits the Legislature from raising taxes in a regular session in even-number years.
Not long after the first special session got underway, it fell apart void of a deal on raising new revenue, or not long after Edwards recognized it would snow in hell before he could convince two-thirds of the House of Representatives to give him every bit of that more than $1 billion in new tax hikes.
Next up was the regular session, which amounted to lot of nothing other than lawmakers approving a budget that wasn’t funded. For the record, the 2018-2019 fiscal year budget stands at a record-breaking $33.8 billion.
With the regular session out of the way, the second special session came along amid an atmosphere of the governor claiming the world would come to an end as we know it unless the Legislature raised taxes to shore up the budget deficit. Just like the first special session, the second one crashed and burned, too, with lawmakers failing to reach an agreement over what to do with Edwards’ demands for new taxes.
The third special session convened June 18 with Edwards still demanding the Legislature approve a .5 percent increase in the state sales tax while Republicans, who had initially opposed any increase in the state sales tax, were now willing to go as high as a .3 percent increase but nothing more. A standoff ensued, or so it appeared.
The “standoff” evolved into Republicans and liberal Democrats, including the governor, caving and agreeing to support Rep. Paula Davis’ proposal to levy a .45 percent sales tax increase, beginning with the new fiscal year. Davis, by the way, is a Republican from Baton Rouge.
Our quick trip down memory lane wouldn’t be complete if we didn’t remind ourselves of the incredibly shrinking “fiscal cliff,” or budget deficit, that Edwards started yacking about roughly a year ago.
Early on, the “fiscal cliff” stood at some $1.2 billion. Then it fell to some $940 million. A short while later, the state’s bean counters took another look at the state’s finances and determined the “fiscal cliff” had fallen to some $650 million, and that’s where it remained at the end of the regular session and throughout the second special session.
Yet, something happened somewhere between the second special session and the third special session and in the blink of an eye, the “fiscal cliff” miraculously shrank to a mere $505 million.
There’s a number of ways we could look at all of this mess. We could consider the nearly $500 million in new taxes the Legislature approved. We could consider Edwards’ record-breaking budget of nearly $34 billion.
We could take Republican lawmakers, by and large, to the woodshed for embracing yet another round of new taxes, which largely will be paid by the working men and women of Louisiana.
Then again, let’s just sit back and let the voters sort it out on election day in 2019.