Why Is It A Good Idea To Run A $300 Million Surplus, Again?

We were going to get to this last week but a few things got in the way, so we’re going to knock it out now. Just a few days late. Because we really can’t let John Bel Edwards and his pals in the state’s mainstream media get away with bragging about running a surplus after killing Louisiana’s private sector economy.

Gov. John Bel Edwards says Louisiana will close the books on the last budget year with a surplus around $300 million, the third year in a row the state has taken in more money than it immediately spent.

The Democratic governor announced the surplus estimate Thursday at the Louisiana Sheriffs’ Association summer conference during a gubernatorial candidate forum.

Edwards said an official number of the leftover cash from the 2018-19 budget year won’t be known for several more weeks. He said the estimate comes from his budget analysts’ calculations.

Louisiana has had three years of surpluses: $123 million from the 2016-17 budget year, $308 million from the 2017-18 budget year and the latest one.

Surpluses must be spent on certain one-time items like construction projects and retirement debt payments.

State representative Mark Wright’s reaction to this was pretty much spot on…

During my first session, we saw a lot of statements about what would happen if we didn’t pass a temporary sales tax.

My biggest disappointment is that we didn’t enact long-term tax reform, but my close second biggest disappointment is that we heard ridiculous statements about kicking our elderly out of nursing homes. It was never going to happen and this surplus shows that many of us were justifiably wary about the doomsday scenarios. Louisiana’s economy is slowly showing life compared to other states and we are seeing the effects in revenue.

Let’s look at the long-term picture and make some tough decisions that will help create a much better state economy and the jobs that can help us flourish and enjoy our great culture.

What’s key to remember here is that Louisiana had a $300 million surplus LAST YEAR, and yet efforts to give that money back to the people who actually earned it went nowhere.

Remember Lance Harris’ bill this spring to lower the state sales tax over the next five years? You probably don’t, because while it passed with 73 votes in the House it was strangled to death in a Senate committee at the behest of the same John Bel Edwards who is bragging about surpluses.

Edwards decried the bill as an affront to the “stability” that he says he brought to state government. “Stability,” meaning he pumped Louisiana’s budget up from $25 billion when he took office to $35 billion now, making use of a lot of federal dollars which could go away practically at any time once Congress finally starts to become concerned about the federal deficit – and jacking up taxes practically every way he could, the vast majority of which hit the state’s business community right in the shorts.

Everybody makes a big show of whining about sales taxes as “regressive,” because the poor supposedly pay a larger proportion of their income on them. This is hogwash, though – the necessities of life are generally not subject to sales tax, and if you’re poor it generally means what you’re spending money on is necessities. Yes, you will feel that sales tax more if you’re poor and you’re buying a flat-screen TV. Maybe don’t buy that TV?

But if you want to see real money coming out of a half-cent sales tax, consider a chemical plant buying and selling bulk quantities of stuff, or an offshore oilfield service company selling food and equipment to the rigs, and so forth. A half-cent sales tax on a $10 million contract is $50,000. And those companies have accountants who can figure out that it’s cheaper to conduct that transaction in Gulfport or Baytown than in Fourchon or Baton Rouge.

Which is why your economy has shrunk two of the last three years and the one year it didn’t shrink it grew at a paltry 1.1 percent. Not to mention that some 68,000 more people have moved out of Louisiana than have moved in since Edwards took office, and by the time his term ends that number is likely to top 100,000.

But sure, brag about running a $300 million surplus two years in a row after you sucked the life out of the state’s economy. Great plan.

Don’t ever let anybody tell you this guy is a moderate or a centrist. He’s practically a communist when it comes to economic policy. He thinks the state’s budget is more important than its economy, and that so long as government agencies have all the money they want he couldn’t give a flip about the taxpayers who actually make Louisiana work.

It’s disgusting. But it’s where we are until the voters are willing to wake up and throw this guy out of office.

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