Congratulations to the state’s politicians for finally raising enough in taxes to balance the state’s budget, we guess. Turns out there’s a surplus at the state capitol.
Louisiana got a rare bit of good budget news: Gov. John Bel Edwards’ chief financial officer says the state ended the last budget year with a surplus topping $100 million.
Commissioner of Administration Jay Dardenne today outlined the better-than-expected finish to the 2016-17 budget year, saying Louisiana collected more money than projected from sales taxes and personal income taxes in the year that wrapped June 30.
“The books have been closed on the revenue side for Fiscal Year 2017, and we’re not going to have a deficit. The economists will be reporting that we have a surplus well in excess of $100 million, which is obviously good news,” Dardenne says.
State economists will provide further details on the tax collections to Louisiana’s income forecasting panel Thursday.
While the news is a bright spot for a state struggling through years of repeated financial shortfalls, Dardenne says the surplus won’t help with the $1 billion gap looming in mid-2018, when temporary sales taxes passed by lawmakers last year expire.
Surplus dollars, under Louisiana’s constitution, can only be spent on certain one-time expenses, like debt payments, construction work, coastal projects and replenishment of the “rainy day” fund. They can’t be used to pay for agency operations or ongoing programs.
Dardenne and the governor are taking this as some sort of validation of their budget strategy, but of course that wasn’t exactly how things happened. Remember, there was a mid-year deficit. It was $300 million. And as a result, there was a special session in which some cuts were made and a reform allowing the state to tap dedicated funds for debt service payments that had been made through the General Fund was passed; that reform accounted for about $90 million of the $100 million surplus they’re now claiming, with another $20 million or so in cuts based on eliminating positions in state government that were funded but not filled (because the deadhead jobs those entail are literally deadhead jobs).
In other words, this isn’t the redemption John Bel and Jay are claiming it to be. If anything it’s a redemption of having an independent legislature, or at least an independent House led by Speaker Taylor Barras and Appropriations Committee Chairman Cameron Henry, which fought the governor tooth and nail over reining in his spending. You will read that recognition nowhere else in the state’s media; instead, you’re going to see Edwards and Dardenne regaled as budgetary geniuses who finally repaired the damage Bobby Jindal did to Louisiana’s public fisc.
And then we’ll go back to the same screaming about deficits and fiscal cliffs, and how taxes must go up or else the state will have a billion-dollar budget shortfall next year.
By the way, we’re now hearing rumors that Edwards has promised the state’s road construction companies that he’ll dedicate half of the $1.2 billion in revenues brought in by the one-cent temporary raise in the state’s sales tax toward road construction if they’ll get behind the effort to make that penny permanent next year. Meaning that if the governor gets his way Louisiana will have the nation’s highest sales taxes for the foreseeable future, which will have a considerably deleterious effect on a private-sector economy which is already more or less the worst in America.
Consider that Louisiana ended up with a $100 million government surplus while losing a net of about 2.1 percent in median state income, and about 7,000 jobs lost. You’ve got yourself one fat, gluttonous state government – and a lot of scrawny citizens trying to make a living.