JBE, Your Taxes And A Series Of Unfortunate Events

Governor John Bel Edwards’ approval rating is about to plummet and it won’t be entirely his own fault. The Governor is about to become victim of a series of unfortunate events related to taxes.

Event #1: the Trump tax cut kicked in this past month. Several W-2 earners saw their pay stub for the first time, since the tax cut went in to effect, and enjoyed an increase in take-home pay. All across Louisiana, working class folks received a $40 or $80 or $100+ increase in their paychecks thanks to federal taxes going down.

We can all remember being 16 and getting our first paycheck and wondering who FICA was and why he took all of our money. Well, workers in Louisiana got the opposite feeling this past week and it must have felt great. The kids got a much deserved movie night; mom’s car finally got that new tire; dad sprung for the rib-eyes for the weekend barbecue. (Those spent dollars will also help our economy grow, but I digress…)

Event #2, Louisiana is one of three states to allow its citizens to deduct their entire federal tax liability from their adjusted income before paying state taxes. This is part of the state constitution. Carelessly, the Louisiana Department of Revenue forgot to make this clear to employers back in January. On Thursday, LDR issued an emergency rule and updated the state income’s tax withholding tables to compensate for the federal tax law.

Added together, this means that thousands of Louisiana workers saw taxes go down for one or two pay checks, before they will soon see them go back up in an effort to follow LDR’s protocol. For example, a laborer may have received $100 more in his paycheck last week but in his next check his earnings may go back down $50 or so. Those folks will angrily ask, “Why”? They will be told “because the state of Louisiana increases taxes when the federal government decreases taxes”. That will be true, in a convoluted way. The sophisticated constitutional issue will go overlooked.

Unfortunately, those workers will likely blame John Bel Edwards.

Which brings us to unfortunate event #3: today begins another special session. I think this makes 5, but I admit – I’m beginning to lose count. What will be the talk in the newspapers? Governor Edwards and Democrats looking to balance the budget by raising taxes.

In summary, the average voter will draw unfortunate conclusions:

  1. Republicans & Trump lowered my taxes in DC.
  2. JBE & LA Democrats took advantage of the decrease to raise state taxes.
  3. Now, they are in a special session trying to raise taxes even more.

To be clear, #1 & #3 will be true and #2 WILL NOT be true. What will be true, is that this will create a dandy of a political problem for the red state Democrat governor.

The actual calamity with our budget, and what is causing this humorous conundrum, is systemic and being caused by the state constitution (as we alluded to above). The Louisiana constitution tries to do TOO MUCH. It is literally amended just about twice every year, and by popular vote. Can you imagine the U.S. Constitution being amended by popular vote regularly? The charter papers for America being changed regularly based off of any and every political fancy, and being voted on by voters who barely pay attention? It would be 3000 pages long by now. Can you even imagine a board changing its bylaws every 6 months with a vote from the members who never bother to show up to stakeholder meetings? In Louisiana, you don’t need to imagine that because that is our reality.

This is why so much of the budget is locked up in a way where lawmakers can’t adjust the expenditures. It also does weird things like mandate annual increases in the Minimum Foundation Program for schools without taking into account revenue at all. The lawmakers have their hands tied. They can only alter 10-15% of the budget: prisons, hospitals & higher ed. And boy, those sure have been altered. What else can they do? We need bold, gigantic reform. We need a NEW state constitution.

The legislature has been a victim of our ridiculous state constitution for years. At the pay offices in these upcoming weeks, JBE will finally become a victim of the constitution himself.

The truth is, Louisiana will never fix our budgeting woes without tearing up the state constitution and starting over. It’s time for a convention. Now, JBE must become a loud proponent for a new constitution – if only just to save his own hide.

….all because of a series of unfortunate events.

 

 

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