Julia O'Donoghue's news article in the Times Picayune of 4/12/15 titled, "How the State fell so far into the hole" is a very long commentary that spans three governors, Mike Foster, Kathleen Blanco and Bobby Jindal. Many reasons are given why the state is facing a $1.6 billion budget deficit and how the state has arrived there but the bottom line as to how the state got itself in this position is simple and the story could have been much shorter.
The story does confirm what this writer has been saying. Louisiana has a revenue problem because of tax cuts, the $8 billion in business tax breaks, the film tax credits, other business tax credits and a lack of corporate tax revenue. When coupled with Jindal's use of one time money to plug budget deficits for recurring expenses that whole package is fiscally irresponsible.
Ronald Reagan and George W. Bush were President for 16 years. Both cut taxes that favored the wealthy and business using the ideology of trickle down economics. Neither President balanced a single federal budget during that 16 year period and gave the country and its people 16 years of deficit spending. They proclaimed those tax cuts were going to allow for economic growth, a boom in jobs and a balanced budget. They did neither.
Bill Clinton raised taxes on those making over 200,000 a year and the corporate tax rate, balanced the budget with surpluses, presided over a record economy and increase in personal income and created more jobs in 8 years than Reagan and Bush did in 16 years.
Bobby Jindal pulled a Reagan-Bush, blew the $800 million surplus left by former governor Kathleen Blanco and repeated the Reagan-Bush failure on the state level and to boot O'Donoghue"s article tells us that of the largest 87 companies in Louisiana that filed taxes in 2012 only 22 paid corporate income taxes. Less than half of those companies, 42 to be exact paid franchise taxes. Also in the story is the fact that Louisiana has attracted a lot of new business activity to the state but government has not seen a corresponding boon in corporate tax collections.
The conservative ideology of the republican party has been a complete failure on fiscal responsibility and also a lesson in contradiction. They believe people on food stamps don't want to work, so why should business who are receiving corporate welfare in the form of tax breaks work to create more jobs, expand and provide more revenue for the state. They don't as indicated by those few that end up paying corporate income taxes. The tax savings actually end up in larger salary and bonus money for their CEO's and executives.
Understanding the failures of the past is still the key to a better future. That is why for conservatives, the future is like the past. And the big problem is the people are the ones to pay the price for a failed ideology. Will the Louisiana legislators be willing to stand up and be counted in this legislative session and lay the ground work for fiscal responsibility for the future? They certainly have the opportunity and authority to do so. In fact, they should have recognized the problem early on that trickle down economics is a fairy tale and has a history to prove it.
This commentary written by Joe Lorio
