As state officials struggle with continuing deficits — deficits that have so far caused continued cuts to higher education — a debate is emerging about how to fill the money hole.
Many state leaders say the state faces a problem of expenditures, arguing the cuts present a chance to rein in state spending.
Some, however, argue that expenditures are only one piece of the puzzle, and increased revenue — which may mean increased taxes — should be considered, as well.
Gov. Bobby Jindal has repeatedly said taxes are not the solution to the state’s budget woes. Jindal has also stated he will veto any new taxes the Legislature sends to his desk, and many state legislators have echoed the governor’s sentiments in previous legislative sessions.
But the sentiment isn’t unanimous. State Sen. Ben Nevers, D-Bogalusa, says increasing revenues should be considered as the government tries to balance the budget, especially given that some officials say the cuts to higher education could be catastrophic.
Nevers is the chairman of the Senate Education Committee.
“Everything should be put on the table,” he said. “I’m willing to do whatever’s necessary to make sure higher education doesn’t get dismantled.”
For example, Nevers said he would like to see the Legislature consider reinstating the controversial Stelly Tax Plan.
The Stelly Plan, which reduced the state sales tax on some items and increased state income tax on some citizens, came under fire during the state’s economic boom resulting from an oil boom and the post-Hurricane Katrina construction boom.
In 2008, the Legislature repealed the income tax increases
while leaving the sales tax reductions untouched. Nevers said restoring the plan would net the state about $300 million.
“That’s about what we’ve cut from higher ed,” he said.
Other state legislators have joined Nevers in calling for a discussion about possible tax increases. In a meeting with LSU Student Government President J Hudson and Vice President Dani Borel, Rep. Patricia Haynes Smith, D-Baton Rouge, criticized Jindal for his tax policies.
“The governor issuing this blanket statement will be the demise of so much,” Smith said.
Jindal isn’t alone in his opposition to tax increases, however. State Treasurer John Kennedy said raising taxes won’t fix the state’s budget woes until spending is reined in.
“I watched Edwin Edwards raise taxes. I watched Mike Foster raise taxes,” Kennedy said. “It didn’t work.”
Kennedy also pointed to California, which he said is struggling with a worse budget deficit than Louisiana despite much higher taxes.
Kennedy proposed a 16-point plan he said would fix the deficit without tax increases or drastic cuts to higher education. The plan focuses on reducing the number of state employees, the scope and cost of state consulting contracts and tweaks to the state’s Medicaid system that would eliminate waste.
Other state leaders have said Kennedy’s proposal won’t save the money he anticipates. The Governor’s Office has directly addressed several of his points on a new Web page answering questions about the budget deficit.
For his part, Nevers said he doesn’t have a problem discussing Kennedy’s proposal.
Nevers said he thought it was unlikely that tax increases would gain any traction in the next legislative session.
“I don’t think it’s feasible at this time. If the governor doesn’t support it, it won’t happen,” he said.
 
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Contact Matthew Albright at [email protected]