In January of this year, Gov. John Bel Edwards told local media that there was a chance the Louisiana Legislature might have to ‘try’ a Constitutional Convention in order to correct ongoing budget issues.
Since, Edwards has announced a special session where Louisiana lawmakers will attempt to close a $304 million deficit before the regular session starts. The governor’s plan is to tap into the rainy day fund, and some other minor cuts, to make up for the disparity.
The special endeavor started Monday evening, time will tell if it becomes succesful.
If history is of any consequence, Edwards shouldn’t have a cheery outlook - not only with regard to closing the budget gap, but fixing the problem permanently.
First, the aforementioned $304 million gap will require some rainy day funds to close. If that sounds familiar, its because Edwards’ predecssor, Bobby Jindal, used the tactic all the time (along with one-time collections) to fix money issues.
Edwards wasted no time in blaming Jindal for the state’s current financial woes, so pulling a move out of Mr. Jindal’s playbook is no way to win friends and influence people.
Unfortunately for Mr. Edwards, he may not have a choice. Thanks to the Great Flood of 2016, the marathon of legislative sessions in 2016 seem like a distant memory, but it’s been just 12 short months since that happened.
During that period, the legislature went with tax raises - dropping the state’s sales tax system rating from 50th to some negative number - and removal of tax cuts.
The Legislature also issued cuts to higher education, TOPS, and healthcare.
This is the second blow for Edwards, and probably why he’s gone ahead and made mention of a Constitutional Convention - those cuts and increased taxes worked, in that that generated more revenue for the state.
They didn’t work, however, in that the budget deficit wasn’t fully filled.
So, the governor must hope - probably beyond hope - that the changes can be made in the special session to make up for the shortfall, opening up the regular session for further advances.
If that doesn’t work or, as is more likely the case, the moves are more of a temporary measure - like the tax increases, which only last until June 2018 - Edwards will have to go back to the drawing board on the Louisiana Constitution.
The last successful constitutional convention was in 1973. The changes were approved by a statewide vote in 1974, and took effect in 1975. Former Gov. Edwin Edwards attempted a constitutional convention in 1992, focused mainly on fiscal reform, which was unsuccesful.
That in itself should worry Louisiana’s current chief executive, who would have to call a convention under the same reformative banner.
Today, however, the past must remain the past. Without a convention, Louisiana’s governing bodies will have to continue using an arsenal of band-aids to fix gaping wounds caused by a broken system.
A situation that will only grow worse come 2018, when adjusted sales taxes fall off.
Louisiana has bottom of the totem pole education rankings, along with poor health and wellness; a sales tax system which sits at 50th nationwide; a $13 billion infrastructure list, half of which are priority; traffic issues in the New Orleans and Baton Rouge metro areas which would make Atlanta, GA and Washington, D.C. blush; and, finally, some ‘minor’ drainage issues brought to light by the ‘Great Flood of 2016.’
At what point will the fiscal situation in Louisiana be bad enough to incite change?
Change won’t be easy - many companies, contractors, municipalities, and even citizens have become very reliant on the current system to stay solvent. People will fight to keep their status quo intact.
But, change must come - much of the state coffers have been consitutionally dedicated to expenditures that stray too far from the general mandate government - laws, infrastructure, safety, education, etc. While some areas of Louisiana have the population for representation, the income level and tax base just isn’t there to support government systems.
Taxes cannot increase, especially since Louisiana sports the lowest median income - $45,700, $10,000 lower than the U.S. average.
No, responsible spending must be the goal, with a budget that hinges on real revenues, not a GDP anchored to oil - a product who’s revenue is much less, respectively, than it was when it was adopted as the standard... in the 1980s.