State Treasurer John Kennedy says when it comes to fixing the state budget, the legislature is doing it all wrong.
“Your goal ought not to be, ‘We need to get some more cash in this place.’ Your goal really ought to be, ‘Let’s make a tax system that looks like somebody designed it on purpose’,” Kennedy told the Baton Rouge Press Club Monday.
Lawmakers have advanced bills for temporary fixes, like suspending sales tax holidays, limiting film tax credits, and taking 20% off the top of the refundable business inventory tax credit. Kennedy said he’s disturbed by the lack of an organized plan to actually cure the state’s fiscal problems long-term.
“I know they’re gonna say they don’t have enough time, and I understand that. Maybe they don’t.”
He still believes lawmakers should have gone through tax credits, exemptions and statutory dedications one-by one, and done a cost-benefit analysis on each of them.
“I mean the last time we looked at them, really, to weigh their cost and benefit was never.”
He suggests they come back after the session ends “for as long as it takes”.
Meanwhile, he says, the legislature is cooking up a tangle of spaghetti.
“The way to make tax policy shouldn’t be a process of throwin’ them all against the wall and let’s see which ones stick and can get enough votes,” Kennedy said, adding, “Mark my words – out of all these tax changes? We’ll end up having to go back and redo about half of ‘em.”
Kennedy, who also teaches constitutional law at LSU, says some of the revenue raising bills moved forward without the constitutionally required 2/3 majority vote for levying, increasing or repealing taxes, and are therefore vulnerable to court challenges.
In addition, he’s disgusted with the laissez-faire attitude that seems to be overriding any effort to enact – or even discuss -- permanent solutions.
“This attitude that, ‘Oh, it’s gonna be okay because we’re gonna bring in a new set of people.’ New is easy; right is what’s hard!” the Treasurer stated emphatically. “I don’t care who you bring in. Until you understand how you got where you are, you’re not going to be able to fix it.”
As for his prediction of whether the legislature will solve the deficit, and whether they’ll incur a budget veto by the governor, Kennedy says he’s not sure how the budget will end up. But he doesn’t expect it to be pretty.
“My guess is this thing is going to end up duct-taped,” Kennedy predicts. “They’re gonna have a little present for the new administration and the new legislature by going, ‘We can’t solve this problem. We created it, but we can’t solve it, so welcome to Louisiana state government. Here it is’.”