Folksy GOP bromides won’t solve Louisiana’s budget crisis

By Robert Mann

Have you noticed how politicians often compare government work to running a household or small business, especially when revenue declines? “If our families or small businesses begin to run a deficit, we don’t have many choices,” former state Rep. Mike Johnson, R-Bossier City, (now a member of Congress) wrote last year about Louisiana’s chronic budget shortfall. “We tighten our belts, cut unnecessary expenses, and make whatever changes are necessary to balance our budgets.”

It’s as if dealing with money problems in either endeavor — business or your family — is nothing more than making a few painful-but-obvious decisions.

That’s the simplistic approach state Rep. Lance Harris, the Republican House leader from Pineville, takes toward the $304 million mid-year budget shortfall he and other lawmakers will address in a special legislative session Gov. John Bel Edwards plans for February.

On Jan. 19, Harris released a one-page document he portrayed as a plan to eliminate the need for a special session to prevent deep cuts to healthcare and education. “If this were my business,” Harris tweeted, “this is how I would solve the mid-year deficit.”

And what is the Harris plan? A cut of 8.12 percent (and, in a few cases, 4 percent) applied across the board to almost every state government department. Those spared cuts in Harris’ “plan” include higher education, Veterans Affairs, Social Services and retirement. Those not spared include the state’s public-private hospitals, prisons and public schools.

What Harris portrays as a plan is using a budgetary meat cleaver to hack away set percentages from the targeted department, regardless of its mission or the vital services it provides. Despite his invocation of shrewd business acumen, Harris’ approach — indiscriminate cuts — is not what a smart business leader would do.

A CPA friend of mine, who advises businesses on budgeting and strategic planning, observed that an across-the-board cut to fix a business revenue shortfall is often the wrong approach. “You might be ignoring things that need to be cut by 100 percent,” the CPA told me, “and there are things that you might need to increase to help you make your business run more efficiently.”

For example, one might spend more on document management software to achieve net cuts by eliminating more costly photocopies. Cutting software and photocopies by the same amount might reduce spending but could damage the business. A more creative approach might yield real savings and a more efficient operation.

An effective business owner wouldn’t look only for spending cuts, but also smart ways to increase revenue. You might double down on advertising or hire additional sales staff to increase profits. Some businesses also might adjust their prices to account for inflation or lagging demand. And if the company had cash reserves — analogous to the state’s Rainy Day Fund — you might dip into it to get through hard times.

That’s the savvy budgeting and management practices we expect from our political leaders and that is lacking from Harris and his Republican caucus.

Continue reading on NOLA.com at this link.

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7 Responses to Folksy GOP bromides won’t solve Louisiana’s budget crisis

  1. Edith Herring says:

    I think we have been conditioned to think that “we don’t have an income problem…we have a spending problem” has become a “truth” to many in Louisiana, thanks to former Treasurer and now Senator Kennedy. In order to make the kind of real and serious business decisions called for in your article, first you must have real and serious public servants and not politicians looking for a quick, bumper sticker, catchy fix. We the people need to get wiser and more involved.

    Liked by 1 person

  2. Stephen Winham says:

    Gov. Edwards asked the legislature to come up with its own proposals for cutting the budget if it did not like his. If Rep. Harris’ proposal is an example of the solutions the legislature will bring forward, it is a complete failure. It does nothing to fix anything. It makes already mediocre services even more so. Government exists to provide services, not to make a profit. If we are not going to provide the revenue necessary to provide adequate services, we need to cut some services in order to adequately fund others and, to the extent the provisions of those services we keep can be made more efficient, they need to be made more effective. Across-the-board cuts, particularly after at least 9 years of them, is just plain stupid. By the way, Louisiana pays for a lot of things at the state level other states rely on local governments to fund. It is easy, as a potential alternative to across-the-board cuts to say we should stop our state subsidies to local efforts, but then what are the locals going to do?

    Liked by 1 person

  3. Frank Shaw says:

    Dennis,

    Yep, my law partner’s son is the Democratic Speaker Pro Tempore of the House of Representatives with these clowns who blocked him from being the Speaker despite the wishes of our Governor, just because they are both Democrats. Bobby Jindal cut taxes as per his pledge to Grover Norquist and now revenues are clearly inadequate. Jindal sold State assets and used everything we had not to raise taxes. And because he was running for President. He has cut our universities so much that I debate whether to send my kids to LSU, the state flagship university which has had to fire 500+ professors.

    And yet now these clowns want to make more cuts. We can’t cut any more. Except the TOPS scholarship program which they won’t cut because it pays full tuition for every college student with a 2.5 GPA or better. Sounds like welfare? Well it is. Republican welfare, as are the $8 billion in state tax credits to businesses we give away each year.

    This is what Harris says: “We tighten our belts, cut unnecessary expenses, and make whatever changes are necessary to balance our budgets.”
    What about raising revenue as a “necessary change” in face of a deficit you idiot! If your family doesn’t have enough money do you turn down a second job! He is a dumb shit.

    Respectfully,

    Frank Shaw

    Liked by 1 person

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