The 2015 legislative session convenes today, with just 60 days to solve a one-point-six billion dollar budget deficit. Has it ever been this bad?
“We’ve gone through this a couple of other times; the Arab oil embargo in the early 80s, and then also in the middle 90s when Roemer was governor,” House Clerk Butch Speer recalls. “We had those two crises, and they were actually worse than this one. Certainly in the middle 90s we were over a billion dollars short. We’re a billion and a half now, but the budget is 6, 8 times as large now.”
Still, this is a bad situation, and Legislative Fiscal analyst Greg Albrecht says lawmakers’ moods reflect that.
“This one they seem to be a little more worried about, because the size is so big,” Albrecht observes.
There’s not enough revenue, and only one way to raise it dependably—raise taxes. Council for a Better Louisiana president Barry Erwin says that’s a bitter pill for legislators to swallow.
“I think we have finally reached the tipping point where their hands are so tied, and the problem is so big, the solutions are so few, that they really have no other choice,” Erwin says.
Any tax increase is going to have to get around Governor Jindal’s “no tax increase” pledge to Grover Norquist’s Americans for Tax Reform. And there’s another complication for lawmakers: it’s an election year.
“They know that if they do raise a tax—no matter what it is—it’s going to be something that they have to overcome when they run for re-election,” Speer said.
There is one possible scenario that could avoid voter backlash and a Jindal veto over higher taxes: suspend all tax credits for a year, leaving it for the next governor and legislature to solve. Robert Adley’s Senate Bill 90 is that escape hatch.