As expected, the panel that forecasts how much money state government is expected to collect in taxes and fees over the next year disclosed Monday that Louisiana lawmakers must find about $1 billion to prop up the state budget for the fiscal year that begins July 1.
That’s the case because tax collections have plummeted thanks in part to the Louisiana economy being shuttered for going on two months now in light of Gov. John Bel Edwards’ dictates to combat the Chinese virus. Or whatever in the hell you care to call it, which may or may not be politically correct. By all means, be mindful of a liberal’s feelings.
Fueling the fire in Louisiana’s economic collapse was a major downturn in the price of a barrel of oil. Why? For starters, Louisiana is still addicted to severance taxes ginned up by the oil and gas industry, and anytime the oil patch takes a hit state government takes a hit, too. In the hip pocket. Secondly, the Saudis and the Russians couldn’t agree to cap oil production as the worldwide demand for oil tanked as economies around the world ground to a halt to thwart the spread of the aforementioned Chinese virus. Millions and millions of barrels of oil flooding the market drove the price of a barrel of oil into negative territory for the first time ever. Accordingly, Louisiana’s severance tax income disappeared for all practical purposes. Sound somewhat familiar?
Since Louisiana lawmakers only have about three weeks to cobble together a balanced budget before the end of the regular legislative session we most likely will hear talk about raising taxes versus so-called draconian cuts to state spending. Odds are Edwards has entertained the idea of proposing a tax hike in lieu of budget cuts, but even a liberal Democrat like Edwards probably recognizes it wouldn’t be a good idea to tax people who have lost their jobs during the Chinese virus craze or tax businesses that are on the verge of going bankrupt courtesy of the same.
What are lawmakers and the governor to do?
Most likely the Legislature will approve a state budget that’s chock full of steep cuts in spending for higher education and health care since those are the two big ticket items in the budget that don’t enjoy any constitutional or statutory protections. Think of low hanging fruit. Moreover, think of which cuts in state spending are most likely to yield the loudest howls among the populace. And be forever mindful that the politicians and the bureaucrats will turn to their public relations specialists, otherwise known as the Capitol bureau reporters and their newspapers, to spread the word to inflame the dependents.
Edwards as well as many lawmakers know the general public isn’t going to like the looks of a state government that’s $1 billion skinnier than before, and the only way to make everyone happy again is to raise revenues. Either through a tax increase during a special legislative session later in the year or courtesy of a bailout from Uncle Sugar, otherwise known as the federal government.
Perhaps that explains why Edwards has been in Washington constantly kissing President Donald Trump’s ass.
Sam Hanna Jr. can be reached by phone at 318-805-8158 or e-mail at email@example.com.