Louisiana’s steep decline in revenue seems to be a mystery to the Baton Rouge Advocate.
In a front-page story today, reporter Koran Addo observed, “Lower than expected state tax collections have Louisiana’s four public college systems scrambling to cut a combined $25 million from their budgets in the next three weeks to keep the state’s current budget balanced as the fiscal year comes to an end June 30.”
“Lower than expected”?
Seems to me that the Legislature and Gov. Bobby Jindal (and Gov. Kathleen Blanco before him) surely knew that state revenues would tank when they essentially repealed the Stelly Plan and cut taxes for the wealthiest Louisiana taxpayers.
(In an upcoming post, I’ll discuss how Jindal & Co. promised us that this huge tax cut would revive Louisiana’s economy. We’re still waiting for that.)
In 2007, the Legislature began a phased-in reinstatement of the state deduction or federal itemized deductions, which effectively lowered income taxes for those who itemize their deductions — primarily upper income taxpayers. This became fully effective in 2009. In the 2008 legislative session, the income-tax-bracket changes were repealed, so the top income tax rate of 6 percent once again applied only to income over $100,000 for joint filers, not $50,000 as had been the case under Stelly.
The projected three-year cost of these tax cuts is $1.8 billion, according to estimates by the respected Institute on Taxation and Economic Policy (ITEP).
According to a very good chart that accompanied today’s Advocate story, the Legislature and Jindal, since fiscal year 08-09, have slashed state appropriations for higher education by $426.5 million.
I’m no math major, but my calculations indicate that the amount of these tax cuts — $1.8 billion over three years — exceeds the amount the state has cut from the state’s higher education budget.
This was all predicted by the Louisiana Budget Project and others several years ago.
So, exactly how is the lack of revenue for higher education “lower than expected”?
I know that the reporter surely meant to say that tax revenues keep declining faster than the state’s economists and legislative leaders can predict.
But let’s be accurate about the problem here: If Jindal and Co. hadn’t blown a $1.8 billion hole out of Louisiana’s budget, we wouldn’t be talking about higher education and health care cuts.
This was a self-inflicted wound, in the name of economic development, that didn’t stimulate the economy and is slowly destroying Louisiana’s colleges and universities.