With Congress back from its summer recess, Governor John Bel Edwards was in Washington Thursday, pressing for more federal flood recovery funding.
“Our goal is to make sure that those people coming back to Washington, D.C., from all over the country, know what happened here in Louisiana,” the governor stated.
Yet there are concerns that more federal dollars flowing into the state budget will lessen any legislative will to enact comprehensive tax reform next spring.
“It’s not going to solve these structural problems in our budget. That’s a job for the Legislature and the best time for them to do that is 2017,” Louisiana Budget Project director Jan Moller says.
But consider the fiscal philosophy of Louisiana’s House leaders, as succinctly stated by House Appropriations chair Cameron Henry during the three sessions this past spring.
“We have to balance cuts with revenue.”
And the state will see a sales tax revenue bump this fall as residents repair and replace their flood-damaged property, paying the extra penny of sales tax enacted this year.
“Don’t forget that even though the state is going to get some new tax revenue from this, the state is also incurring a lot of unexpected expenses in dealing with these floods,” Moller advises. “FEMA’s going to pay for a lot of it, but they’re not going to pay for all of it.”
And no matter how much federal help Louisiana gets, Moller says it’s not going to stop temporary taxes from going away, leaving Louisiana facing a dramatic drop in state revenues.
“There’s $1.3-billion in tax revenues that the Legislature raised in the last couple of years, that’s coming off the books in 2018, that has no replacement, he warns. “Anybody who thinks that this little uptick in tax revenue that we may see from the floods is going to solve that $1.3-billion problem is dreaming.”
Still, lawmakers have dreamed before – cutting taxes once they saw the state treasury swell with federal funds following Katrina and Rita, and leading Louisiana inexorably toward the current fiscal problems.