…and your humble author is here to provide it to you.
1. Louisiana’s government is growing, and the governor is doing everything he can to grow it more. The Louisiana budget is more or less a billion dollars larger than it was last year. The idea that we’re in a budget crisis is a pure contrivance.
The budget is larger mostly because of the Medicaid expansion, which John Bel Edwards says is saving the state money. He says that because the federal government is paying for the expansion, and even though it isn’t paying for all of it the money the feds are shoveling to Louisiana offsets state money that is spent on indigent health care.
Because the feds only pay 60 percent of what the state spends on indigent health care, see, and the feds pay 90 percent of the Medicaid money. So the more people who are on Medicaid rather than being indigent, the better off the state is.
Which is an entirely fraudulent argument – because Medicaid expansion isn’t aimed at “indigent” people who don’t work and have no income. It’s aimed at lower-middle class people who don’t have health insurance because they can’t afford it and their employer doesn’t provide it. And while there are lots of people fitting that description, what you’re actually getting by expanding Medicaid is a lot of lower-middle class people who DID have health insurance until the Medicaid expansion came along and that expansion, combined with the skyrocketing premiums Obamacare has brought with it, induced the employer to drop the expense of providing insurance and dump all of the lower-rung employees onto the government health care dole.
So where the state was paying zero percent of the health care cost, now it’s paying 10 percent.
Or, because no doctor in his right mind takes Medicaid patients thanks to the awful reimbursement rates and the stupid paperwork you have to process to get paid, having Medicaid means diddly poo when it comes to having access to health care. So what happens is the Medicaid patients end up at the emergency room instead of some doctor’s office where they ought to be for non-emergency care, and while the state might well only be paying 10 percent of that cost it’s emergency room cost – which is five times more expensive than anything else.
What this means for the people of Louisiana is your budget is a billion dollars larger and the quality of the service your state government is providing to you is worth not one red cent more.
And Edwards has a budget deficit that he demands more of your taxes for.
2. Louisiana’s economy is a five-alarm fire right now. This state has lost 16,000 jobs since this time last year. That’s a crazy number. The losses are largely the result of oil and gas going completely down the tubes, but they’re not completely the result of the slump in oil prices. They’re also a function of the state’s sudden turn away from competitive economic policy.
Edwards isn’t to blame for the oil slump, just like Bobby Jindal, who is ceaselessly blamed for creating the “crisis” Edwards won’t stop screaming about, wasn’t to blame for oil prices taking a dive and all the negative effects that brought on. That’s an economic condition larger than any mere Louisiana governor can control. The question is what you do about those effects when the drought comes. And the answer is you have to work on diversifying your economy – not by giving money away to companies so they’ll locate here, but creating conditions where your own home-grown companies can succeed. You have to have as limited, and as well-run, a government as possible at the state and local level. You have to have a tax code that makes sense and that incentivizes people to make investments here. You have to have the best workforce possible for the smallest cost burden in education possible. You need an infrastructure which facilitates the movement of goods and services across the state, rather than hindering that movement.
And so on.
The problem is, Edwards isn’t interested in any of those things. What he’s interested in, and he has made this clear, is doling out as much free stuff to as many people as possible in an effort to hook a large number of Democrat voters up to the gravy train. For that mentality, which is perhaps best described as weaponized governmental failure, bad economic news isn’t a bug, it’s a feature. The more private-sector jobs he can chase out of the state the better – those people vote Republican, after all. And if their jobs go, he’s got food stamps and Medicaid and welfare checks at the ready, so in a few years when they’re government-dependent he can mobilize them practically to riot over the mere mention that their free stuff might get cut.
The rest of us might be horrified that Louisiana’s economy is going back to the 1980’s and early 1990’s. He’s not. He looks at those years as a time that while the rest of the South was turning Republican Louisiana staved that off by having the mama pelican feed the baby pelicans amid poor economic times.
3. We’re going to have a special session, and it will be a damned near-run thing if in fact we do avoid more massive tax increases. Bear in mind that in the last year there have been some $2 billion in taxes raised in Louisiana, and the governor still says the state’s budget is in the red by $600 million. The guess is that number is overstated, and the impact of those tax increases is grossly understated.
But he needs a further set of tax increases, and here’s why – his sales tax increases are going to melt away, both by statute because they’re meant to be temporary and because of the inevitable Unintended Consequence that people will not spend as much money buying things in Louisiana once the price of those things has been raised. The deal the Legislature cut with Edwards in the special session was that he could have reduced exemptions and a higher rate for a year or two in order to stabilize the state budget, but that was only to buy time in order to make changes to the state’s fisc and eliminate the hundreds of millions of dollars in built-in waste we’re paying for.
But Edwards has no interest in sticking to that deal, and he knows that politically it’s a lot easier for Republican leges to defend a tax increase than it is to defend cutting some program people perceive as essential even though objective analysis makes clear it’s a waste. Louisiana gets less bang for its buck on K-12 education dollars flowing out of the state capitol to the tune of $3.5 billion per year than any other state, for example, but shifting that cost burden to the local school boards which actually do run schools and have taxing authority to fund themselves is politically impossible. Why? Because those local school boards would scream bloody murder if they were put in position to have to raise their own funding through local taxes imposed through the ballot. That’s far too much accountability for the little princelings on those school boards to have to bear. And so the leges are pressured to raise taxes in order to keep everyone’s public-sector rice bowl filled, while the productive economy decamps for Texas – where there is no Minimum Foundation Program doling out welfare from the state capitol to the local school districts, and people don’t complain about local property taxes to fund good, accountable local schools.
Those tax increases, presumably on business and higher-income Louisianans, will replace the sales taxes that will be going away which affected Edwards’ voters more. And that’s exactly how the governor wants it.
But since the conservative movement in the state is basically exhausted and demoralized, and since the Legislature is devoid of leadership, while there is a majority in the House to oppose Edwards there is no presentation of an alternate vision. It’s hard to beat something with nothing. And because of that problem, to stop those tax increases you need 53 votes in the House willing to be blamed for cuts to TOPS, which is Edwards’ primary weapon. If they don’t raise taxes Edwards and his stooges in the Senate will make sure that the budget shortfall comes as exclusively as possible on those TOPS parents. There is lots and lots of money that could be saved elsewhere, but it’s to Edwards’ advantage to make the whole thing about TOPS.
I wrote last week that the leges need to call Edwards’ bluff and demonstrate to him that if he wants to abuse the TOPS program that way and hold it hostage to his tax increases, it’s going to be on him. But nobody expects that to happen, and Edwards surely doesn’t. Demands that he find something of a lower priority to cut will go completely unheeded, because he thinks this is a winning political strategy for him. It will take leadership and discipline to puncture that balloon.
4. Edwards can smell re-election, and while he shouldn’t have the faintest chance at it he’s not insane for being optimistic. That because if he gets those tax increases in the special session, the chances are pretty good that he’s going to have a surplus at the end of the year. He’ll be able to style himself as the man who solved Louisiana’s fiscal “crisis,” and he’ll be the hero of all the state bureaucrats, public college people, schoolteachers, cops, firemen, health care workers and every Democrat constituency imaginable. They’ll make him a superstar, and the media will play along.
He’s counting on the fact that nobody will be able to effectively get a message across that what he’s done is to steal hundreds of millions of dollars to pay for ever-larger state government which doesn’t provide any more value than it did when it was half this size. That message will be the truth, but who’s going to tell it?
There are some decent spokesman out there, but the best of them, John Kennedy, is running for the Senate and he’s going to bother with Edwards less and less since he’ll be talking about federal issues and spending his time beating up on John Fleming and Charles Boustany and how terrible Congress is. And Jeff Landry will be a thorn in Edwards’ side but as the state’s Attorney General his box will be the legal and constitutional issues and not particularly the size of government. As for the legislature, go ahead and name me somebody who’s shown he can stand up to the governor on fiscal issues. If Cameron Henry can’t do it, and without criticizing him he can’t, since he couldn’t pass the budget his Appropriations committee drafted on the House floor without it getting torn to pieces, much less get it to the governor’s desk, then it’s hard to say who can.
Which leads us to our final point, which is…
5. Don’t look to the Louisiana Republican Party, which is essentially moribund, for help. That’s not a criticism of the state GOP or its leadership. But Roger Villere, who is the country’s longest-running state party chair by far, is coming to the end of his road in that position and Villere doesn’t have the length of tenure, or political stroke, necessary at this point to revamp the mess that the party is in. Nor is it his fault the mess exists; Villere never had the resources to mend the rift between David Vitter and Bobby Jindal that broke the party; the best he could do was to paper it over until last year’s gubernatorial election blew it wide open and let Edwards steal the governor’s mansion.
But worse, Villere is from Jefferson Parish. And while he’s not the problem in Jefferson Parish, Jefferson Parish is the problem in the party.
Quick – who is the most influential state legislator with an “R” next to his name? Who is the most influential local government official with an “R” next to his name? If you said John Alario and Newell Normand, you would be correct.
And Alario runs the Louisiana legislature at present. Nothing gets through the Senate unless he wants it to. He will take legislation nearly everyone in the state wants and push it to a Senate committee that will kill it, so that Edwards doesn’t have to. And he will insure that the House has to swallow John Bel Edwards’ budget, whether they like it or not, because the Senate will send that budget to the House with 15 minutes left in the session if Alario has to do it that way.
That’s your “Republican” Senate president. And you are powerless, if you’re Roger Villere, to do anything about it. You’re also powerless that your Republican leader in the Senate is Danny Martiny, who is an Alario buddy but more to the point is a Newell Normand stooge.
So much so that if Newell Normand backed up suddenly, Martiny would have a broken nose.
We saw that in living color last week when Normand and Martiny killed the sanctuary cities bill it would otherwise have been impossible to imagine wouldn’t have gone to the governor’s desk. Normand showed up at the legislature to drop a few vulgarities and turn purple, and Martiny killed the bill in committee, and that was it. Edwards was the happiest guy in Louisiana to see that happen; he said he liked the bill but he was lying, and its death solved lots of thorny political problems for him. Alario, who insured the bill would fail, was doing so on the governor’s behalf – do you think you could go to Alario’s district on the West Bank of Jefferson Parish and find any sympathy for sanctuary cities?
If there are two more powerful Republicans in the state right now, we don’t know who they are. And that is a catastrophe for the Republican Party in Louisiana at a time when it desperately needs someone to rally around if it’s going to keep Edwards from dragging the state back to the bad old days.