As of Friday, May 26th, Louisiana’s Legislature (House and Senate), must complete its ongoing fiscal session, in the next thirteen calendar days. The legislature must enact and the Governor must sign a budget that meet their Constitutional “fiscal duties.” More precisely, they must complete two fiscal budgets in this fiscal session.
First, the State must adjust the current year’s budget (July 2022 through June 2023) to allocate (spend, pay debt, or save) almost $700 million in surplus funds from our previous year’s excess taxes, added to surplus federal COVID funds, and $320+ million in excess tax revenues that we only recently realized the State will receive from our excess taxation. It is embarrassing that the State just “realized” it would take in this excessive tax revenue with only fifty days left in the fiscal year. The State’s Revenue Estimating Committee suddenly “realized/declared” last Thursday (May 18th) that the State would take in this extra $300 plus million in taxes by the end of June 2023. This embarrassment will be addressed another day, but for now the legislature needs to complete its Constitutional duties. Second, the State must enact a financially responsible budget for next year (starts July 2023 through June 2024).
As you can see, the excess spending from the federal government, and Louisiana’s grossly excessive taxation has generated about $2 billion above and beyond the normal revenues the State has had in the past. Nonetheless, these unearned, excessive tax revenue dollars must be allocated (spend, pay debt, or save) inside these two yearly budgets, We will talk about cutting these excess taxes below.
The good news is that the Louisiana House of Representatives has passed the most fiscally sound budget ever enacted. Importantly, the House of Representatives has preserved and protected the Louisiana Constitution’s “spending cap” to prevent government growth beyond the growth of taxpayer income. The House stepped up and passed a phenomenally responsible budget, known as House Bill #1 (“HB1″). HB1, when enacted, implements spending and saving priority of which Louisiana, the Wall Street Journal, and Louisiana taxpayers can be proud. To be clear, what HB1 accomplishes is magnificent spending restraint, and spectacular (once in a lifetime) reduction in State debt.
The merits of HB1 are obvious.
It directly pays off the twenty-five plus year debt of the State that was being paid by Louisiana school boards to cover State teacher retirements already owed to these teachers; and it pays off the twenty-five plus year debt that is currently owed by the State to cover State employees retirement benefits already owed to these State employees. The payment of the teacher retirement debt (owed by the local school boards) frees up sufficient local revenue for each school board to give its teachers pay raises of $3,000 per year. Equally, the payment of the State retirement debt in this year’s budget will free up $350-plus million for the State to use for programs in the following fiscal years.
HB1 also funds substantially all pre-existing programs to sustain those obligations, and pays approximately $900 million into our State savings account (“Rainy Day Fund”). This payment into the Rainy Day Fund is important, as Louisiana’s “savings account” compared to our neighbors is very low, as measured as a percentage of our annual budget. These actions will improve Louisiana’s fiscal standing going into the future.
Finally, the House is on the verge of using a good portion of these magical revenues to pay an additional $220 million into the Rainy Day Fund. If this payment is made, every taxpayer in Louisiana will have our income taxes cut in half. That is an existing requirement owed to the Taxpayers. House and Senate, $2 Billion is excessive. Reduce our taxes by saving these excess funds in the Rainy Day Fund.
Unfortunately, I must report that our Senate, and our Senators, have done nothing to start the process of Constitutional budgeting except to try to save little and spend most of the $2 billion in excess revenues. The only meaningful budgeting act by the Senate was to pass a concurrent resolution that says whatever the Senate decides to spend, know that the Senate fully intends to bust the Louisiana constitutional spending cap! See, Senate Concurrent Resolution 3. The Senate will soon decide if they, like the House, will approve a economically responsible budget that pays down debt, and honors the Constitutional Spending Cap.
Advertisement
Even more irresponsible, is the fact that the Senate has become the silent killer of almost all House bills that have passed out to the Senate. All of the following House bills have been passed and are floundering in the Senate, while legislative days are running out. We can not let the Senate be the graveyard of good legislation, such as the following House bills in the Senate:
- HB1 Louisiana budget bill for fiscal year 2022-2023, and fiscal year 2023-2024.
- HB12, Require all third graders have reading proficiency before going forward.
- HB98, “School Choice” funding to allow k-12 students to attend any school.
- HB648, that prohibits “gender altering” surgery, treatments, on minor children.
- HB466, prohibits gender and sexuality discussions by school staff (K-12th Gr.).
- HB8, require school staff to use birth certificate name and pronouns, unless parent provides written consent otherwise.
At this moment – with fifteen days left for the legislative session – the Senate is an embarrassment. Our Senate has done nothing fiscally responsible, it has not agreed to pay into the Rainy Day Fund and thereby cut income taxes, and it has failed to protect parent’s rights to raise their children according to the parent’s education and moral beliefs. At this point the failure of our Senators is obvious, and inexcusable. This next week will tell the tale if our Senators have chosen to fail us or fight for fiscal responsibility, tax reduction, and family fidelity.
My recommendation to our Senators is “dare to be a great Senator, protect HB-1, pay into the Rainy Day Fund and cut income taxes, and protect our parents and children. There are elections coming. The voters will judge each Representative and Senator by their voting record. Please lead Louisiana into a fiscally sound future.
Paul Loy Hurd, Attorney and President of “Louisiana Excellence, Inc.” (#1 Advocate For Repeal of Income Taxes and Sales Taxes”); You can contact Mr. Hurd at paul@LouisianaExcel.org.
Advertisement
Advertisement