How is Gov. Bobby Jindal going to deal with the projected $1.6 billion budget deficit for the next fiscal year? We know he doesn’t want to raise taxes, so will he cut spending, use onetime money, eliminate tax exemptions or try a combination of all three?
The guessing games will continue until next Friday, when Jindal has to announce his budget plan. Most of the ideas he has bounced around for a couple of months have failed to gain a lot of traction.
If the House had its way, budget cutting would take first priority. The chamber considered closest to the people that its members represent has tried that solution for years now only to be upstaged by the free-spending Senate.
Jindal went along with senators last year when virtually every available dollar in savings was spent to prop up this year’s budget. And if the upper chamber had its way, higher taxes would be more than welcome.
This isn’t the first time a governor and Legislature had to confront a billion-dollar problem. Former Govs. Edwin W. Edwards and Buddy Roemer faced the same dilemma, but they came up with fixes using different approaches.
Taxes quick solution
Edwards never hesitated to raise taxes when the going got rough. And that is exactly what he did in 1984 after defeating Dave Treen to win an unprecedented third term. He came up with a billion-dollar revenue-raising package at a special March session of the Legislature.
The Associated Press said the governor told lawmakers “he would not hold a grudge, politically or personally, against legislators who disagreed with and could not support his programs. However, he urged the lawmakers to ‘get on the train’ and work together, with him, to move the state ahead.
Edwards added, “You can’t get run over if you’re on the train.”
When that session ended, the state had increased its sales tax by 1 percent to a total of 4 percent. However, food, prescription drugs and other items continued to be exempt.
The state also had higher taxes on gasoline, cigarettes, liquor, corporations, sand and gravel, timber and pulpwood, hazardous waste and insurance. The total came to between $700 million and $800 million, short of the billion-dollar goal.
Louisiana had a population of 4.2 million at the time, and the per capita (person) tax came to nearly $171 per year.
The AP described Edwards’ lobbying team as “formidable.” They included Camille Gravel and Edmund Reggie, two well-known attorneys, Lt. Gov. Bobby Freeman and state AFLCIO President Victor Bussie.
“They encouraged, cajoled, promised and horse-traded, trying to gain support for the Edwards proposals,” the AP said. “As the Senate started debating the tax package Friday, both Edwards and Gravel sat on the speaker’s stand, next to Senate President Sammy Nunez.”
Edwards didn’t get everything he wanted and said budget cuts would still be necessary.
“I am saddened by the prospect,” he said. You would think all of those additional millions would have taken care of the state’s financial needs much longer, but Edwards left Roemer in the same situation he faced four years earlier. Here is how Roemer, the only man to ever defeat Edwards, described his situation: “We inherited a mess, a real unbelievable mess,” he told a special session of the Legislature. “Time is eating us alive.” A projected deficit for the 1988-89 fiscal year totaled $756 million, and the state had an accumulated debt of $1.3 billion. Roemer asked for, and lawmakers gave him, authority to cut up to 20 percent from each budget department and eliminate entire state programs through June 30, the end of the 1987-88 fiscal year. He also got authority to eliminate scores of special funds in the state treasury.
“More borrowing or new taxes are not now the answer,” he said.
One of Roemer’s more unique solutions was to have the Legislature create the Louisiana Recovery District. It would get 1 percent of the state’s 4 percent state sales tax and use that money to back $1.3 billion in bonds dedicated to erasing the state’s debt.
Went down hard
It was a tough pill for some lawmakers to swallow. The late state Sen. Bill McLeod of Lake Charles spoke for that group. He called the district “an end run against the constitution, which says we must have a two-thirds vote to impose a tax.”
McLeod added, “I have held my nose and voted against good government in the name of fiscal emergency. I have voted for things I never thought I would have voted for. If Edwin Edwards had asked me to vote for these, I would have told him to go jump in the lake.
“It grieves me that our crisis is so great that we have to resort to subterfuge such as this.”
The courts upheld the constitutionality of the recovery district, but it isn’t looked upon favorably today by some legislators and others who were around in those days.
Regardless of what Gov. Jindal and the Legislature decide to do at the upcoming fiscal session, one thing is clear: Those who make fiscal decisions in this state haven’t learned much from the past. They keep making the same mistakes over and over again.
Even though they have enjoyed some surpluses in recent years, governors and legislators — for the most part — keep coming up short. The end result is a state government that can’t adequately fund essential services.
Jim Beam, the retired editor of the Lake Charles American Press, has covered people and politics for more than five decades. Contact him at 494-4025 or [email protected].