Sunday, April 29, 2007

As Usual, Little Relief from Louisiana “Governor”

The Times-Pic is quite generous in framing Louisiana “Governor” Blanco’s budget priorities with the headline: “Blanco pushes ‘modest’ tax cuts.” Her real priority according to the paper: “more than $1 billion in proposed new spending, the vast majority of which is targeted to education, healthcare and pay raises for government workers.” Yes, some spending increases will be necessary to rebuild a damaged educational system, however, her proposals do not adequately address the economic challenges ahead for the state.

The State of Louisiana has been losing jobs even before Katrina hit. Although there are some welcome tax credits for families, there is very little her budget proposal that will actually stimulate the economy. Her best proposal is: “A $36 million decrease in the sales tax on utilities charged to businesses.” However, rather than consistently propose such tax cuts that would spur systemic recovery, which would be completely feasible given the $1.22 billion projected surplus, much of her “wish list,” such as it is, involve outlays designed to lure in a big fish. According to the T-P:

“Another $100 million has been penciled in to help lure a German steel mill to the state. Lawmakers in a December special session put $300 million in a special fund to help make infrastructure improvements to the proposed site in St. James Parish.

Alabama, Louisiana’s only competition for the plant, has anted up $400 million for the plant and other economic development projects.”

What the “Governor” should be proposing are permanent changes to the state’s tax code that will make Louisiana more attractive to businesses, not bidding on big ticket development items with taxpayer money. Louisiana businesses could certainly use some relief, but it looks like they will have to wait until the current occupant of the Governor’s mansion vacates the premises.