No Fast Fiscal Fix to Be Found

The challenge of fixing our pending fiscal cliff will require a third special session of the Louisiana Legislature. The frustration within the body is palpable and no one within the Capital is unmindful of the exasperation felt by our citizens and their persistent cry to “just fix this”. The greatest impediment to fixing “this” lies in how both sides define what “this” is or is not, which ultimately is defined as a responsible state budget. To some, the fix is cutting/reducing government and to others raising revenue to maintain or enhance state services. There is no doubt that a majority of both chambers believe the solution is somewhere in between and there is broad consensus that we can and will fix this. However we define our problem, the most pressing issue is finding a way to address the deficit that will occur June 30 when the temporary one cent sales tax expires. Depending on whom you ask the deficit will be in the neighborhood of $490-$680 million. Without replacing some portion of that funding, significant cuts will be required and will affect healthcare services, higher education/TOPS and across the board cuts to state agencies.

Both sides of the political aisle agree that part of the fix will require raising some revenue and both have proposed revenue raising measures in addition to some cuts and reducing exemptions. The proposed solutions, apart from having government deal with the reduction and having to make drastic cuts to existing services, will require either paying one third or half of the one cent that expires at the end of the month. Ultimately people will pay less sales tax than what is currently assessed. The difference between the two according to Jim Richardson, an LSU economics professor, would cost a family making $25,000 an additional $7 each year, a household income of $50,000 would pay about $23 more a year, or on a $100 purchase, 17 cents.

The eventual solution will require compromise and an appreciation of how both sides view how we deal with our recurring budgetary problems. Fiscal conservatives contend that government can operate more efficiently and by reducing our tax burden, this will spur economic recovery and increase state tax collections. On the opposite end of the spectrum, those will contend that we must continue to provide state services at current levels especially those that impact low to moderate income families.

Some will decry Washington style politics, as the cause of this impasse, and despite the philosophical and political differences that do exist, both sides recognize we need to restructure how we fund and operate our state budget. We cannot rely on temporary fixes, or maintain our bloated and dysfunctional budgetary process which sustains abundant taxing authorities and dedications. We give lip service to reform but with true reform there will be individuals, businesses and government services that will be impacted. It will require compromise, acceptance, and implementation of those tough decisions on the part of all within our state in order to “just fix this”.•

BY STATE REPRESENTATIVE JEROME ZERINGUE