Thursday, April 26, 2012

Brown Bag Lunch #5: Louisiana's Budget — Giving It All Away

Brown Bag Lunch #5 centered on Louisiana's recurring budget problems. Jan Moller of the Louisiana Budget Project and Representative Katrina Jackson of Monroe were the speakers. Both made the case that the state's budget problems are self-inflicted wounds that are the result of run-away tax expenditure policy.

Mr. Moller maintains that the policy dates back to the initial attempts to undo the impact of the voter-approved Stelly Plan. Rep. Jackson says that at least one-third of the state's budget problems can be traced directly to tax expenditure policies initiated by the Jindal administration. She also makes the case that it is irresponsible to be making cuts in essential state services without knowing the true cost of the state's tax expenditure program — that is, those programs through which the state waives and exempts taxes, or rebates tax dollars to companies and individuals.

In the first video from the event, Mr. Moller makes the basic case that the seemingly endless string of budget shortfalls are problems governor and lawmakers created themselves.


In the second segment of his talk, Mr. Moller says that the state's budget problems will get worse before they get better and that a combination of external and internal forces might force, at the very least, a cost-benefit analysis of the 464 tax exemptions the state has on its books. Those exemptions cost state government $4.8 Billion every year.



Representative Katrina Jackson is the author of HB-1104 which would require that agencies and departments administering state tax breaks, incentives, exemptions, and rebates, provide annual reports on the fiscal and economic impact of those tax expenditures. She said her bill brings transparency and accountability to an area of the state budget where none currently exists.



Representative Jackson said the purpose of HB-1104 is to bring the same kind of transparency and fiscal responsibility to tax expenditures as is applied to line items in the state budget. She agrees with the Louisiana Department of Revenue and the Legislative Auditor that tax expenditures are every bit as real expenditures of state dollars as are line items. There needs to be the same level of accountability applied to those expenditures. They must deliver a return to the state on those investments.



On Tuesday, the Revenue Estimating Conference announced that the state will experience another revenue shortfall in the current fiscal year that ends on June 30. The hole is estimated to be just under $300 million. Cuts in programs will have to be enacted in order for the Governor and Legislature to comply with their constitutional mandate to keep the budget in balance.

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