Dardenne: The State Spends $2 Billion More Than It Takes In, So You’ll Have To Pay Up

Every word of this was painfully predictable. Every word.

Lt Gov Jay Dardenne said Wednesday morning that budget shortfall is close $2 billion.

The budget architect for incoming Gov Elect John Bel Edwards said everything is on the table including tax increases. Dardenne said he could not be specific but the budget situation is worse than in the 1980s.

Of course.

The shortfall is close to $2 billion, AFTER the state legislature told us they had to raise our taxes $700 million in the spring. Shockingly, that $700 million in increased taxes didn’t actually result in $700 million in new revenues, but certainly Dardenne and the rest of the John Bel brigade will come up with taxes that will perform a lot better this time.

You notice that it’s Dardenne who’s sent out to tell the folks the bad news that the budget is worse than anybody thought and they’re going to be raising taxes, right? That had to be done, because had Edwards done it himself or sent anybody but the token Republican it would be almost a cliche’ – elect a Democrat, your taxes immediately go up.

Yes, but Dardenne’s a Republican who demands a tax increase, so this is different.


Here’s a question – is that $2 billion shortfall based on current spending levels, or projected spending levels? Are they working off a zero-based budget, or are they pumping the budget up by the customary five percent across-the-board spending? Or are they throwing in all the pet projects Edwards has promised his people?

Because if this is about Edwards increasing LSU’s general fund budget by $150 million or so and now the budget is $2 billion out of whack, there’s a pretty simple answer – which is that Edwards oughtn’t have made that promise because he can’t deliver on it. He doesn’t have the money.

And he won’t get it.

Here’s a story we heard yesterday coming out of the last round of tax increases they cooked up at the Capitol. As our readers know, the state’s idiotic inventory tax scheme, in which local governments whack businesses with a gigantic inventory tax but nobody minds because the state reimburses them for 100 percent of the cost, has been changed as a result of the 2015 regular session; those taxes are now only 72 percent reimbursable.

So one car dealership in the northern part of the state is now moving – this week, we’re talking about, and it’ll be done by close of business today – most of its inventory to a yard in East Texas. They’re been processing (not really paying, because the state has reimbursed them) about a million dollars in inventory tax a year, but for 2016 they’re only going to carry enough inventory in Louisiana for a $400,000 tax burden. They’ll end up paying about $112,000 out of pocket to the local government, and the rest of that 400K the state will pay to the parish.

So the local government is losing $600,000. And maybe the state government has saved that money, but get ready for the screaming and howling about the loss of the local tax base.

Meaning this entire project is a disaster in the making. And Dardenne’s tax increases will only be more of the same, because they’re all going to fall on businesses with the wherewithal to maneuver out of having to pay them, whether by doing things like the car dealer in North Louisiana did or just picking up and leaving.

Instead of imposing the kind of fiscal discipline on the state it desperately needs, which means significantly cutting the size and scope of the state government and making major changes to how it does its pension system, the first thing out of Dardenne’s mouth is tax increases which will by their nature underperform. And when they underperform, and do damage to the tax base the Edwards administration is trying to exploit to fund a bloated public sector, we’ll hear demands for even more tax increases.

Rinse and repeat.

Most Republicans wouldn’t have anything to do with this project. Jay Dardenne is happy to jump aboard. That’s why Jay Dardenne finished fourth in the primary. He’s validated everything that’s ever been said about him, and he hasn’t even taken office as the Commissioner of Administration yet.

Welcome to the next four years, Louisiana. Just remember, you bought this – and now you’ll pay – and pay – for it.



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