Dear readers,
I know it’s been nearly a month since I initiated this series to gaze into the murky depths of Louisiana’s future, but the reason I’ve been remiss in continuing – up till now – centers around physical vision. Cataracts which had been increasingly clouding my vision are now gone, along with my eyeballs’ natural internal (and rather defective) lenses. The new bionic version means – for the first time in 60 years – I don’t have to put glasses on in order to see further than one foot in front of my face.
That defect in sight is known as myopia, although it’s commonly called “nearsightedness.” It’s also an apt analogy for the majority of Louisiana’s elected officials – particularly our lawmakers.
We can be relatively certain of some things: that it will get dark outside after the sun goes down, or that our bed will support us when we lie down on it. Strictly speaking, we are acting on faith, rooted in past experience, when we make these assumptions. There is no absolute guarantee the earth will continue spinning on its axis, and if it does not, there goes sunrise and sunset, along with gravity and that whole lying on the bed thing.
Yet we can reasonably expect those things will continue.
What can we reasonably expect for Louisiana’s future?
Much more of the same bottom-of-the lists rankings, unless we, and the lawmakers we have elected, make a concerted effort to alter our state’s policies, laws, and tax structure in ways that will address the underlying poverty-connected parameters keeping our state rated low and our population struggling with an average annual per capita income of $27,027 (compared to the national average of $33,706).
Benjamin Franklin famously wrote, “In this world nothing can be said to be certain, except death and taxes.” Here in Louisiana, as in many other parts of the nation, there are certain people who do everything possible to remove the certainty of taxation from themselves and their peers. (And why is it so many of those same people are the ones that believe in their heart-of hearts that they have no peer? But, I digress.) In so doing, of course, those individuals and all-too-frequently the corporations from which they derive their income, shift the burden of taxation to everyone else.
That “everyone else” already includes far too many Louisianans that, for one reason or another, struggle daily with being on the lower half of the socio-economic spectrum: 14% of Louisiana families with earnings below the national poverty line of $24,036 for a family of four; 45% of Louisiana’s children living in single parent households; and an overall state population that is nearly one-third African-American.
No small part of all this is the legacy and continuation of institutionalized racism. As Michael Leachman, senior director of state fiscal research with the Center on Budget and Policy Priorities (parent organization for the Louisiana Budget Project) noted in his Martin Luther King Day missive in January, “The wealthiest ten percent of white households own two-thirds of all U.S. wealth,” while “State and local tax policies are partly to blame for sustaining racial disparities in power and wealth, or even for exacerbating them.”
In other words, we the people have elected the people that wrote the laws, rules, and regulations solidifying Louisiana’s bottom-dwelling status in quality-of-life rankings.
Creative Commons photo by IsaacMao via Flickr
It’s not as though we don’t know what needs to be changed, and ways to make the improvements incrementally. There have been study committees and task forces, blue ribbon commissions and detailed reports delineating best practices Louisiana can and should implement. Eighteen years ago, we the people approved a progressive tax scheme, voting into law a constitutional amendment that would gradually grow state income tax revenues based on increasing wages and a realignment of tax rates, while giving some relief from regressive sales taxes. And it was working as intended.
Yet when Louisiana’s treasury swelled with the influx of federal hurricane recovery funds, desperately needed in the horrific aftermath of Katrina and Rita, the majority of state lawmakers saw the total dollar amounts on the plus side of Louisiana’s ledgers, and – without asking voters – passed statutes that undid 2002’s Stelly Plan income tax rates. The author of the tax rate rollback, Sen. Buddy Shaw (R-Shreveport), insisted his constituents were complaining about their increased income tax burden, while, in actuality, only those making at least $80,000 per year had seen their overall state taxes increase. Shaw also insisted that, in the wake of the devastation of the 2005 hurricanes, in 2008 everyone deserved this “greatest tax reduction in the history of the state of Louisiana.”
That “greatest tax reduction” cut some $350-million per year from the State General Fund, leading to the fiscal legerdemain (“Now you see it: now you don’t”) of the remainder of the Jindal years. During those two terms, there was a concerted effort to make Louisiana more “business friendly,” by snipping away at corporate taxes here, there, and everywhere. But in Jindal’s first year in office, in 2008, there was another year with back-to-back hurricane hits, a followed by a national recession, and joined by a major downturn in the oil and gas industry. Eight years later, when the Jindal administration’s financial smoke and mirrors cleared away with the arrival of the John Bel Edwards administration, Louisiana had a $2-billion difference between the state revenue supplies and the state spending demands.
Four years and eleven legislative sessions (seven of them “special”) later, we’ve not adjusted the personal or corporate income tax rates – despite all the reports and studies recommending Louisiana do exactly that. Nope, we’ve upped that most regressive of taxation types: sales tax. And who, in paying that higher sales tax, is contributing a bigger proportion of their smaller income toward paying for all the state’s things? That’s right. It’s the same pool of Louisiana residents whose socio-economic status keeps us dragging the bottom of the state-by-state rankings.
But at least the 4.45 cents of state tax on each dollar’s worth of items sold is stable through 2025.
Or is it?
Some of the strictest conservatives among state legislators find themselves deeply offended by the surpluses the state has been realizing at the end of the past couple of fiscal years, and are rumbling about an early rollback. This is a general session year, however, so they won’t be able to take up the debate until the 2021 fiscal session. By then we may be closer to knowing if predictions of an imminent national recession are accurate.
It was all the talk in the last half of 2019, when 72% of economists surveyed by the National Association of Business Economics were predicting that a recession by the end of 2021. In late January, Dr. Richard D. Wolff, an economics professor at the University of Massachusetts, reiterated that prediction. Noting that the U.S. budget deficit is now nearly equal to what existed during the 2008 economic downturn, Dr. Wolff told thehill.com that “We are overdue” for a recession, and this one could be the “recipe for very serious economic problems.”
These predictions have been a topic of discussion during recent meetings of Louisiana’s Revenue Estimating Committee, as members of that panel regularly query the state’s fiscal analysts whether and how they have factored the potential downturn into their forecasts of state income. They have, as a “slowdown” rather than a full recession, since, as Commissioner of Administration Jay Dardenne observed, “Traditionally, any recession hits Louisiana months – even a couple of years – later than the rest of the country.” Indeed, the 2008 recession didn’t reach its maximum depth here until 2010.
And what are the new legislative leaders who sit on the Revenue Estimating Conference doing to prepare for this potentiality?
Precisely nothing. As of the present time, the new Senate President Page Cortez (R-Lafayette) and the new House Speaker Clay Schexnayder (R-Gonzales) have refused to accept/recognize either of the state’s fiscal experts’ revenue projections, although the House Speaker made up one of his own – with no authorization in law to do so – and offered that as “a compromise.”
Uh, no.
All this is really just wrangling about the short term, however. It’s the equivalent of sitting in a comfy chair in the living room, hiding behind one’s reading glasses and the newspaper, not seeing the smoke billowing out from the food burning in the kitchen.
At present, only two state agency sectors have done any longer-term envisioning of – or planning for – the future. Next up: a look at those plans, what they missed considering, and which agencies could benefit most from creating their own long-range master plans.