By Doug Strickel
By the time you wake up to this article, we will either know who our next president will be, or we will be waiting on final counts and/or recounts. Both parties talk in terms of winning and losing, so I assume that means that we are not electing a leader but rather naming a winner. Where there are winners and losers, there doesn’t seem to be much unity.
We will also be finding out who will be elected to Congress, but the term being used is “control”. The question being discussed is which party will gain or maintain control. The term “control” doesn’t seem to be very focused on unity either.
While all this winning, losing, and controlling is going on at the national level, our state representatives will be engaged in a special session geared toward addressing the financial condition and future of Louisiana. For those in Louisiana, this session may have a more direct impact sooner than election results at the national level.
The State of Louisiana is currently faced with steep challenges to attract new industry that will generate jobs and expand the tax base, high insurance rates because of high incident rates and a low base, a declining population as a younger generation seeks opportunities outside the state, and a tax plan that is needed to fund current programs but is not competitive with other states.
There are tough decisions to make and the short-term versus long-term impacts must be considered. Without going into detail, the essence of these discussions is whether we are prepared to lower overall taxes to attract industry, place more money into the hands of citizens, and gradually grow the state’s economy. That sounds like an appealing move, but we must consider the timing and short-term economic impact.
A reduction in tax rates is always a popular campaign talking point! However, a reduction in rates reduces revenue. There must be a corresponding reduction in expenses. Reductions in government funding or programs overall are far less popular campaign talking points. No one wants to talk about it, but it is the only responsible way to address tax reduction, whether we are referring to the national or state level.
Other states have taken significant steps in the last few years to reduce state spending by eliminating some state supported agencies altogether. They have also reduced funding to others to maintain a balanced budget and promote a stronger economy for the long-term. It takes time for industrial growth to pay off, so these spending cuts are vital to maintaining financial stability.
What will our state legislature do? What will be the impact? Higher education is a likely candidate for spending cuts regardless of the outcomes of these discussions. Can our state continue to operate the number of public universities that we currently offer (6% of the State budget)?
Can we continue to operate the level of government that we have become accustomed to at the executive level (8% of the State budget)? Can we afford to continue to invest in secondary education at the current level (15% of the State budget)? Can anything be done to address public welfare (Medicaid/public hospitals, etc.) which represent nearly 45% of the State’s budget?
There’s a lot to be decided, and those decisions will directly impact everyone in Louisiana. We might want to pay as much attention to these discussions as we do with all the national winners, losers, and control focused discussions.
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