Democratic Gov. John Bel Edwards called Louisiana legislators into a 17-day special session on Friday, seeking to end the fiscal uncertainty that has gripped the state government dating back to the former Gov. Bobby Jindal era.
The session will begin at 4 p.m. on Feb. 19 and end on March 7. The 2018 regular session will begin on March 12, and the state fiscal year won’t begin until July 1.
Bel Edwards issued the session, despite not having reached a consensus with Republican lawmakers, particularly those in the House, on a plan to resolve a fiscal calamity to ensue with the expiration of temporary taxes passed in 2016 to address revenue problems Jindal left in his wake. Jindal, who was elected in 2007, ran Louisiana’s fiscal house into a ditch by basing state government policies on hard-right economic policies, like those followed later in Kansas under Sam Brownback and Wisconsin under Scott Walker.
Edwards’s prospects appear to have been bolstered by a letter sent to him early last week from 11 Senate Republicans and three Democrats, urging the governor to call the special session. Senate President John Alario (a Democrat turned Republican) was one of those who signed the letter. Alario said that while there was no consensus on specifics on how to avoid the so-called fiscal cliff, there was enough agreement to believe that one could emerge in the special session.
If the temporary taxes are not renewed or replaced with other revenue measures, Edwards says the state will be forced to cut nearly $1 billion from the only two portions of the state General Fund not protected by either the Constitution or by statutes — health care and higher education.
Under the Louisiana Constitution, legislators can only address the issues a governor includes in his/her call for a special session. There are 17 items included in the call Edwards issued on Friday, which all deal with revenue and tax issues: the taxes set to expire and other tax items including restoring the top two brackets of the state income tax which were repealed in Jindal’s first year in office, broadening the scope and reducing the amount of the state sales tax, reducing and/or eliminating tax exemptions, and a series of budget reform issues that some Republicans are insisting on in return for votes to approve and/or renew taxes.
While Republicans hold majorities in both chambers of the Louisiana Legislature, Edwards appears to be making headway with his argument that the state cannot cut its way out of its fiscal problems. Since the end of the 2017 regular session, the governor met directly with business leaders from around the state, making his case that the state has structural revenue problems and a massive backlog of projects that can only effectively be addressed with new revenue and expanding the tax base.
A tax reform commission was created in the 2016 session charged with examining the state tax code and making recommended changes. The Task Force on Structural Changes in Budget and Tax Policy issued a report in January 2017, with bills to implement recommendations that died in the state House Ways & Means Committee during the 2017 session. As it turned out, the leadership of the House Republican Caucus had decided not to follow through on a public commitment made to Edwards and voters to address the state’s tax structure in 2017. Instead, the Caucus opted to try to squeeze the budget for the current (2017-18) fiscal year in an attempt to stave off consideration of taxes.
The fiscal hardline angered not only Edwards and Democrats, but a significant number of House Republicans. On the final day of the 2017 regular session, 10 Republicans broke with the House leadership on the budget. Days later, more Republicans voted with Democrats and Independents to approve a state budget that their leadership — including House Speaker Taylor Barras — opposed.
House GOP vs. Edwards
Edwards was the first governor in modern history not to have his choice for Speaker win approval by the House he was inaugurated on January 11, 2016. His pick was New Orleans Democrat Walt Leger III. However, state Rep. Cameron Henry of Metairie, a protege of former U.S. Senator David Vitter and U.S. House Majority Whip Steve Scalise, challenged Leger, as did Barras of New Iberia.
Leger led on the first ballot but failed to get the 53 votes needed to secure the job. Henry ran second and Barras third. Henry, sensing that he was too polarizing a figure even in his own party, dropped out. Republicans united around Barras who then defeated Leger in the second round of voting. Henry’s consolation prize was chairmanship of the House Appropriations Committee, the committee which formulates the state budget.
Barras had not held a leadership position in the House prior to being elected Speaker. He has been deferential to Henry and the GOP Caucus leader Rep. Lance Harris of Alexandria. It was Henry who blocked the Senate approved budget from reaching the floor of the House on the final day of the regular session last year. He did that with what amounted to unprecedented veto power granted to him by Harris and Barras.
There was evidence late In 2017 that the rifts in the GOP Caucus have not healed. Those signs came in a series of meetings of the Joint Legislative Committee on the Budget during November and December. The committee is comprised of members of Henry’s House Appropriations Committee and the Senate Finance Committee.
The Edwards administration sought committee approval for extensions of revised Medicaid managed care contracts with private providers that had been implemented without legislative approval by Jindal in his first term.
While Senate members of the joint committee signed off on the contracts, Henry and hardliners from his committee would not. After three tries with the committee, Edwards announced that he would declare an emergency and renew the contracts administratively. That brought Henry and his members to the table and the contracts were approved with slight modifications.
Louisiana Association of Business and Industry Overplays Its Hand
There was fresh evidence last week that even the leadership of the state’s most powerful business lobby — the Louisiana Association of Business and Industry — hardline against Edwards and taxes may be wearing out its welcome.
LABI President Steve Waguespack (Jindal’s former executive counsel and, for a time, his chief of staff) brought in conservative media personality Laura Ingraham to keynote their annual meeting in Baton Rouge.
According to the Times-Picayune, Ingraham delivered a speech similar to her media rants on Fox and other outlets, lambasting a broad range of political leaders and issues. The paper reported that Ingraham derided the removal of Jim Crow statues from New Orleans and other cities, criticized New Orleans Mayor Mitch Landrieu and “said she was considering buying property in Louisiana so she could run for governor.”
Edwards, who had spoken to the assembly earlier, was sitting in the crowd when she made that remark.
The blowback among the membership present was fierce enough to have the usually ‘take no prisoners’ business group to issue a statement distancing itself from Ingraham’s remarks the day after she spoke.
LABI’s statement on Ingraham’s speech was reported by the Times-Picayue to say:
“Ingraham … expressed her views on several national social and political issues, some of which are not reflective of the opinions held by the diverse membership of the Louisiana Association of Business and Industry,” read the statement. “LABI has a long history of listening to all perspectives in a bipartisan manner to develop solutions to Louisiana’s challenges.”
Waguespack and LABI, through a few deep pocketed conservatives, hold considerable sway in the House.
The fact that Waguespack, who is part of an ever-growing list of Republicans said to be considering a run for governor in 2019, had to distance himself and his organization from Ingraham’s remarks is another indication that the hardline against Edwards and against revenue that they have pushed for the first two years of Edwards’ tenure is faltering.
Edwards has bet that it’s faltering as well with his call for the special session.