And the fiscal health of the state is the major topic as state revenues are being depleted by the coronavirus and the shutdown of the business community. With the uncertainty of just how timely business can return to some normalcy and people can be put back to work it is a guessing game as to project revenue for the state to budget properly.
Jay Dardenne, Commissionor of Administration according to a New Orleans Advocate commentary, signaled to the House Appropriations Committee that investments in schools, early child hood education and teachers pay are no longer likely. And that Governor Edwards is asking state agencies for contingency plans to avoid layoffs of state employees.
The collapse of oil prices are another significant reduction to state revenues, but that started long before the coronavirus because of a slow down in the global economy, a glut of oil on the market because of over production and the feud between Saudi Arabia and Russia. And for those who are not afraid to face the facts, the U.S. economy under Trump is more of a stock market economy than a true economy made possible by plans and policy. American manufacturing has been in a recession for many months and job creation has fallen behind the previous administration.
So what did the republican controlled state legislature do at its first day back on the Job? The House Ways and Means Committee passed HB506 to reduce the states severance tax on oil produced from the current 12.5% to 8.5% over a period of eight years. That alone would reduce state revenue by $151.4 million over the next five years. Chief sponsor of the bill Phillip DeVillier said, "lowering the severance tax would entice the oil industry to drill more in Louisiana thereby creating more jobs, which would translate into more sales and income taxes." The usual talking points of the industry and republicans that never takes place. The House Bill now moves to the full House for consideration.
So here we are, the state of Louisiana, who prior to the coronavirus saw much improvement to its fiscal house under the administration of Governor Edwards and who now faces a severe revenue shortage, has a republican controlled legislature that wants to reduce state revenues even more by reducing the severance tax for an industry who needs a reduction the least and who in 2017 received a 14% reduction in the corporate tax rate thanks to the Trump-GOP tax cuts. The industry, who has raped Louisiana's environment and who has never been held accountable, is still the favorite of the republican party for corporate welfare.
Governor Edwards even handed fiscal policies that restored the state after eight failed years of the previous administration needs to prevail again during this particular crisis. We can continue to learn from past mistakes to afford a better future, or we can ignore the past lessons and have a future to no where.
This commentary written by Joe Lorio
