The h Legislature wrapped its third special session of the year with a compromise tax and budget plan that avoided the “fiscal cliff” that lawmakers themselves created. The cliff would have kicked in July 1, the start of the state’s fiscal year, when a temporary fifth penny of state sales tax was set to expire. The impending shortfall threatened education and health care funding as well as programs like TOPS college scholarships and SNAP (aka food stamps). The compromise extended the sales tax at 4.45 cents, enough to keep vital services funded while letting Gov. John Bel Edwards and some of his legislative critics to claim, correctly, that they adopted a responsible budget without raising taxes. Best of all, the extension continues through June 2025, sparing state government and citizens more angst over yet another “cliff.”
Compromise is never easy, and getting there is rarely pretty, but as the old saw about making sausage goes, the end result is good enough for all.
Well, almost all. Staving off fiscal disaster was not good enough for some hard-right lawmakers, who not only held out against a very reasonable middle ground but also seemed determined to give Edwards a black eye. For example, state Rep. Raymond Crews, R-Bossier City, proposed a 4-cent sales tax that would increase to 4.45 cents Aug. 1, just to hammer home the idea that this was a tax increase (his ploy failed), while state Sen. Sharon Hewitt, R-Slidell — who is said to be eying a challenge to Edwards next year — told the media, “We’re piling another $500 million in increased taxes as a result of legislation in this special session.”
State Sen. J.P. Morrell rebutted Hewitt’s contention, saying, “We – the Legislature – gave ourselves two years to do tax reform, and now you start crying about the ‘poor taxpayer’? We tried numerous bills, and every one was blocked in committee by the same people saying ‘woe is me’ today. You want tax reform? File tax reform bills. A fiscal session is coming next spring, and I look forward to you filing tax reform bills, instead of simply throwing critiques from the peanut gallery cheap seats.”
Here’s the truth: According to a legislative report, the state general fund for the just-ended fiscal year was $9.461 billion. That’s higher than previous years under Edwards — but nowhere near the historic high in fiscal year 2008. At that time, the general fund — the money taken directly from taxpayers — was $10.372 billion. Since then, at the urging of then-Gov. Bobby Jindal, lawmakers rolled back the progressive Stelly Plan and began giving billions in tax breaks to corporations while gutting higher education — and using one-time monies to paper over the state’s structural deficit.
The Stelly Plan, which was approved by voters in 2002 — at the urging of business leaders and Republican Gov. Mike Foster — balanced income taxes and sales taxes, the latter of which disproportionately hit poor hns. If the Stelly Plan were still in place, we’d have no fiscal cliffs, and lawmakers would not have needed three special sessions to meet the state’s most basic needs.
Here’s one more truth: The Stelly Plan was fiscal reform.