When Governor Jindal took office in January of 2008, the State of Louisiana was enjoying a budget surplus of $1 billion. This allowed legislators to establish a school voucher program, cut taxes and spend millions on highways and medical research.
The surplus was fueled by record oil and gas prices and billions of federal dollars flowing in to Louisiana to fund hurricane recovery projects. This year, while the country is in the midst of an economic crisis, the financial picture for Louisiana is much gloomier. Another contributing factor causing budget stress is that the price of oil and gas has plummeted in the past few months.
The result is that for the first time in a number of years, Louisiana lawmakers will have to make serious cuts to the state budget. The fiscal projections for the upcoming budget year are bleak. The four-member Revenue Estimating Conference announced recently that income for the upcoming year will be $103 million less than initially forecasted. When the new budget year begins on July 1, the state is projected to have $1.3 billion less in state general fund revenue.
With an economic slowdown gripping the nation, politicians need to be creative and maximize the spending of tax revenues to deliver government services. Since people don't have enough money, they are spending less, resulting in fewer sales and decreased tax revenue for government. Revenues are down for local and state governments all across the nation.
It is time for politicians to do more with less and tighten fiscal belts, just like millions of families and businesses across America. Unfortunately, too many politicians believe that the slowdown is an excuse to raise taxes on a suffering citizenry. It is never a good time to raise taxes, but in these conditions, it is an absurd idea.
In Louisiana, state legislators should be cutting spending to match declining revenues. Sadly, too many Louisiana legislative Democrats are not advocates of fiscal conservatism. In the upcoming legislative session, Democratic legislators will offer at least two bills aimed at increasing taxes.
State Representative Karen Carter Peterson (D-New Orleans) has outlined her plan for a massive increase in cigarette taxes. Carter Peterson wants to boost cigarette taxes at least $1 per pack, raising an extra $200 million from one category of Louisiana residents, smokers. I am not a smoker and hate breathing second hand smoke, but I don't think the state should discriminate against one group of people and try to balance the budget on the backs of smokers. Carter Peterson will be opposed by some Republicans and Governor Jindal. Hopefully, there will be enough opposition to derail her ill-conceived proposal.
Another Democrat; State Representative Herbert Dixon (D-Alexandria) will offer a bill to raise the gasoline tax by 20 percent. Dixon wants to boost funding for state highway construction despite the fact that the state will receive an extra $455 million in infrastructure spending from the recently passed stimulus package. Such a massive tax increase is not justified in good economic times and it is certainly a horrible idea in today's conditions.
Of course, the right approach is to defeat both tax proposals and trim state spending. In 1995, the state budget was approximately $12 billion. It has more than doubled since then while the state population has declined.
On April 27, the Louisiana Legislature begins their session. At that time, legislators will have an opportunity to address these tax proposals and deal with the budget shortfall. It is time for real leadership to emerge and for some courageous legislators to offer fiscal solutions which, in my view, should be centered on the principles of less government and lower taxes.
Jeff Crouere is the Host of "Ringside Politics," which airs at 7:30 p.m. Fri. and 10:00 p.m. Sun. on WLAE-TV 32, a PBS station, and 7 till 11 a.m. weekdays on WGSO 990 AM in New Orleans and the Northshore. He is the Political Analyst for WGNO-TV ABC26 and a Columnist for selected publications. For more information, visit his web site at RingsidePolitics.com. E-mail him at email@example.com.