Jeremy Alford: Spending priorities divide lawmakers

A coalition of conservative forces, ranging from the Louisiana Association of Business and Industry to the Louisiana Family Forum, is coming together to back a tax relief plan that calls for fully funding the Rainy Day Fund and paying down long-term retirement debt.

The members of the coalition, some of which met last week, are opposed to busting the state’s constitutionally created spending cap for the current fiscal year and the next.

They view this tax relief plan as a responsible alternative. 

The plan, which is expected to be released in more detail soon, doesn’t endorse any specific legislation or even a particular chamber’s ideology. 

The Senate and the administration of Gov. John Bel Edwards want to exceed the expenditure limit to spend $1.8 billion on roads, bridges, coastal work, a variety of infrastructure improvements, debt retirement payments and much more.

House conservatives, meanwhile, want to bank the money for the future.

Rather than busting the cap, the coalition plan offers three basic suggestions:

—Fill the Rainy Day Fund, which is the state’s savings account. 

—Pass a reasonable budget using money freed up from paying down retirement debt.

—Assign all available surplus dollars to one-time infrastructure needs. 

There’s a reason the business community likes this plan. Filling the Rainy Day Fund will trigger reductions in tax rates through a mechanism the Legislature created in 2021.

The corporate franchise rate, for example, would nearly vanish, dropping from 2.75% to 0.28%.

Personal income tax rates would decreases as well, but only minimally and nowhere as dramatically as the corporate rate adjustment.

The groups involved in this push so far include Americans for Prosperity, Associated Builders and Contractors, Louisiana Association of Business and Industry, Louisiana Committee for a Conservative Majority, Louisiana Family Forum, National Federation of Independent Business and the Pelican Institute.

On the other side of the issue there’s the governor and Senate President Page Cortez, R-Lafayette, who’s sponsoring the legislation to spend the extra $1.8 billion. (An approving two-thirds vote is needed from both chambers, and the resolution has only made it past its initial hearing.) The Police Jury Association of Louisiana and the Louisiana Municipal Association, which represent our parish president and mayors, respectively, are supportive of lifting the spending cap as well.

With an adjournment of June 8 etched in stone, the regular legislative session is about to host a serious conversation about spending priorities — just in time for 2023 elections. 

The House-backed version of the budget cuts proposed pay increases for educators and reduces health care resources for our state’s poorest and weakest. The current version of the budget even leaves money on the table — the spending plan remains under the expenditure limit for the current fiscal year and the next by $544 million.  

That figure left many wondering why the House would oppose Edwards’ proposal to apply $52 million in state funding in the new budget for thousands of early education spots that will soon lose federal funding. 

While existing state funding for the Child Care Assistance Program is preserved in the House version of the budget, early childhood education boosters wanted the gains funded by the federal government to be preserved by Louisiana’s government. “That doesn’t change the fact that 16,000 families across the state are losing access to child care right now, and the $52 million that was in the previous version of the bill would have saved 4,000 of those seats,” said Dr. Libbie Sonnier, executive director of the
Louisiana Policy Institute for Children.

“We are hopeful the Legislature will find a way to restore that funding before the end of session.” 

The clock is certainly ticking, and the politics are intensifying. How else could early childhood education, a strong bipartisan issue in recent years, end up on the chopping block? In other states, early childhood education, as a policy issue, is treated as a moral imperative. In Louisiana, it gets lost in the politics and is allocated less than 1% of the state budget.

These are the kinds of realities facing lawmakers during the session’s final weeks. They’re also faced with extremes — either pass a budget that includes painful cuts and leaves money on the table or spend every penny, nickel and dime that’s in treasury.

Maybe there’s a happy space in the middle lawmakers can meet. If not, they may be doomed to repeat this exercise in a summertime special session.

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