APPEL: John Bel’s Manufactured Crisis

There is a general consensus that we have a state budget problem; however there is wide disagreement over whether it is a function of revenue or spending. Our state’s economists tell us that the recent shortfalls were caused by our state’s recession and they are expected to slowly abate. We have many options in the short term and unless sustaining or even growing spending in our traditionally ineffective and inefficient manner is one’s goal then there is no need for rash decisions. Predictably however the governor has embraced the perceived political opportunities presented by our fiscal issues by adopting Rahm Emanuel’s political stratagem, “You never let a serious crisis go to waste.”

It is well known that he, as well as many in the legislature, are adherents to Louisiana’s near-century old philosophy of government and its associated high spending basis. Loosely defined as Huey Long populism, or Longism, this philosophy reflects a government in which most power and control is centralized in Baton Rouge and one which is based upon a strong governor and a weak legislature.

But the governor has a problem.

The people are slowly awaking to the truly bad results that this form of government has wrought, as our state is an outlier in following its concepts. The election of a Republican-dominated legislature and of the GOP controlling almost all statewide offices reflects voters who are realizing the advantages of being weaned from traditional government dependency. But old habits die hard and the governor and his allies are using every effort possible to fight change to the very fundamentals that have left us wanting. Advertising easily foreseeable structural deficiencies as a “crisis” necessitating policy choices which would never be acceptable in normal circumstances is just part of the game.

Not recognized by most, Louisiana’s spending addiction is heavily dependent upon massive influx of federal money. To the political class all this seemingly free money is the sustenance that keeps the hayride going, but as we know nothing is free; there is a trap in using so much of other people’s money from the federal government. Most federal programs require a state monetary match and over time our endless pursuit of this not-so-free money has resulted in a dearth of state funds available for other state priorities.

To make matters worse there are endless strings attached to federal money that require us to spend on things that may not be in our best interest or that we need. This additional hidden cost soaks up additional state money that should be prioritized by us, not the feds. It has been reported that the much-debated Medicaid expansion alone will require us to raise or divert $330 million, none of which is budgeted, in the next couple of years just to meet federal obligations. Think infrastructure and education as examples of state priorities that have been sacrificed on the altar of the pursuit of “free” federal money.

In order to try to address the so-called “crisis” our budget issues have wrought, one of the ideas that are being dangled by the governor is of a fiscal-only constitutional convention. Clearly the governor and his allies are hinting to legislators that this idea is a painless way to raise revenue by avoiding the politically difficult problem of actually changing our outdated and inefficient form of government. Such an approach is subterfuge, a phony attempt to mislead citizens in the belief that we would be making sweeping changes when in fact those early twentieth-century structures of government that have retarded our state for so long would be further enshrined by providing them with growing revenue sources.

Let’s look practically at the ramifications of this idea. The talking points being used to promote it are that business must have a simpler, fairer tax code and further, that just such a tax code fix would attract business to Louisiana. Sure business wants a cleaner tax code, we need one, but the underlying problems that contribute to poor economic results due to our unattractiveness to business are derived from many sources, not just our tax code. In the real world the tax code is but one element of an entire government structure that screams for overhaul.

The potential of a limited constitutional convention masks the huge but largely suppressed point that in such a convention there could be no discussion of the reform of either the philosophy of our state government or the specifics of how that philosophy is executed. Most of the areas of government that are causing inefficient and ineffective delivery of services are not written into the fiscal-related sections of our constitution and under a limited-scope convention these extraordinarily important issues would be conveniently out of bounds for reform. Specifically there could be no discussion of priorities, of the use of measures of success in solving problems, of state government’s relationship with local government, of efficiencies, or, even more critically, of any form of vision as to where the state could and should be headed if indeed we were blessed with a beneficial model of modern government. You don’t hear from the governor or his allies that these important discussions would be precluded; all you will hear is how a limited convention could make things all better!

In a similar way, the administration has been promoting the option of raising revenues by legislatively-approved tax code changes. Left out of the talking points and something critical that citizens must understand is that all these proposed legislative instruments would be debated in isolation from each other, not as part of an interlocked reform plan. Some of them would even require highly-unlikely voter approval. Because of this legislative technique it is more than likely that only a limited number of these instruments would ever become law. The result would be convoluted policy much worse than we have today. These newly-enacted taxes would end up just feeding the status quo by growing revenue without reform.

During the last session this process is exactly what the governor had initially proposed, basing his strategy upon the results of the Tax Code Task Force report but conveniently without benefit of any prospect of a global fix. Perhaps isolated legislation was viewed as clever politics but fortunately many in the legislature understood the implications and all bills died. Though he is making a strong case for these “reform” bills once again, as long as they are not part of a revenue neutral global change then they are counterproductive to good government and must not pass individually.

Do we need a new fiscal structure? Yes, but only if it serves as the underpinning of a complete overhaul of state government. We need a new fiscal structure that is streamlined, revenue neutral, and business friendly, true, but if we peel back the layers of the onion on the administration’s narrative that is not what is currently behind this conversation.

Let me reiterate my position. We are not in a fiscal crisis, but it is time to discuss meaningful reform of all levels of government. We must address a short-term shortfall but must not be stampeded by a crisis mentality into helping the governor strengthen the flawed philosophy that has kept us down. We should be concerned only for the long term and that means reform at all levels and not just using the concept of fiscal reform to address our short term issues.

If and when we decide to have a constitutional convention it must not be one limited in scope or one that is controlled by those who would use the concept as cover to raise more revenue to support the status quo. If we have a constitutional convention we must be very concerned about its membership and especially who has the ultimate control; a convention driven by “Louisiana Way” political considerations or by those who want to protect and expand the status quo – the one leading to the current “crisis,” that is – would be far worse than just staying with what we have.

If we decide to address our fiscal issues through the legislative process, then it must be by way of an interlocked, global package of bills and not through isolated bills. A global path could lead to a better outcome for our state; an isolated bill path such as what the governor proposes is assured to result in more taxes with no reform of any kind. Pay attention to who promotes which approach and that will expose who is really interested in the long term health of our state and who is just using subterfuge to disguise a desire to maintain that pesky status quo.

To be sure, there are many sincere people who think that a fiscal-only convention or accepting just any legislative changes, even if they are not a global fix, are good ideas – especially if they buy the “crisis” being promoted by the governor. In many cases they believe this because they are frustrated with little or no progress in this state and they believe somehow that just addressing some fiscal issues will solve our problems. Unfortunately they are wrong and such a simplistic course of action would only shore up the very faults in our state that have led us to being last in almost every socio-economic measures.

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