A University professor will spend many of his Fridays at the State Capitol until September wading through the state’s tax code and honing in on solutions to the recurring budget deficits that have plagued Louisiana for years.
James Richardson, a business professor who has been at the University since 1970, is no stranger to the game of tax policy. He has served as a fiscal adviser to the state in various capacities for decades. In the late ’80s and early ’90s, he advised then-Gov. Buddy Roemer in the wake of one of the worst financial crises in the state’s history — worse than the current problems, according to many who were there at the time.
The committee he serves on, called the Task Force on Structural Changes in Budget and Tax Policy, was commissioned to report findings on how the state can reform its taxes in the recent special legislative session.
The task force comes after years of short-term budget fixes, disparaged by nearly everyone in the Legislature, which caused recurring deficits and bone-stripping cuts to important state agencies including colleges and universities.
And while phrases like “tax code,” “statutory dedications” and “structural reform” may make the eyes of college students glaze over, they affect the cost of tuition, alcohol and cigarettes and hit those students in the wallet.
When the state fell on hard times during Bobby Jindal’s two terms, the former governor took tax increases off the table. Short on cash, the state took away general fund dollars for colleges and universities and raised tuition to make up part of the difference.
“Jindal was raising taxes well before 2015. He just didn’t call it that,” Richardson said. “He made students taxpayers.”
Countless nuances in the state’s fiscal policies put Louisiana in its current position and caused the “tax” — higher tuition — on students. And nearly everyone has a different view on how to solve the state’s structural problems.
Some suggest stripping away dedicated money, which goes by law to certain areas automatically. Others say tax giveaways should be on the chopping block. But just about every lawmaker agrees on sweeping changes, which are expected in the next fiscal session in 2017.
“It can’t continue. You can’t keep sending money out the door,” said Senate President John Alario.
Alario added he’s not “married” to any particular idea for solving the problem but said something needs to happen.
“This structure is pitiful,” said Robert Adley, adviser to Gov. John Bel Edwards.
Richardson said a big problem is the state’s reliance on mineral revenues, most of which come from the floundering oil and gas industry.
“They have to decide they’re not going to rely on mineral revenues to save the day,” he said. “Right now I think they all go to church every morning and pray that oil prices will go up.”
Richardson also chairs the Revenue Estimating Conference, the body that adopts the official numbers of revenue collections.
He said the special session, which was short on time and filled with a crop of new legislators and House leadership, accomplished most of what it set out to do in the current fiscal year, lessening the shortfall from nearly $1 billion to less than $100 million.
But it didn’t come close to solving next fiscal year’s shortfall, which currently sits near $750 million. Many understood that the systemic issues with the budget, that cause cuts to schools and hospitals each year, wasn’t going to be solved in a four-week special session.
“Did they make the tax code better or worse? They made it more complicated. Much more complicated,” Richardson said.