Dear Friends,As I begin my ninth year of service as your State Representative in Baton Rouge, I continue to be honored and humbled to represent you.
This is a very hard time for our state, and we are faced with a number of difficult choices, as we face a budget crisis unlike any Louisiana has seen before.
Because of this, the Legislature was called into a Special Session to deal with finances. By the time it ended onMarch 9, we had reduced our projected $940 million deficit for this fiscal year (ending June 30) to around $70 million.Our deficit for the next fiscal year (2016.2017) had been projected up to $2.1 billion, but during the Special Session we were able to reduce that number to around $800 million.
If this budget were a fishing line, we would have a “bird’s nest” – and we can’t just cut it away: we have to unravel it and fix the problems.
Our new Governor, John Bel Edwards, is an experienced legislator, and he has set out a program that can bring us through this crisis. Just as in Washington, however, politics is rearing its ugly head. And, as we struggled through oneSpecial Session – called specifically to deal with our budget problems – it became clear that we have much more work to do.
Legislative sessions in even.numbered years (like 2016) cannot, by law, consider fiscal issues, like taxes. There is, of course, a crowded agenda of issues that can be considered, some of which can reduce the deficit of $800 million without dealing with taxes.
The financial questions will have to be dealt with, and that may require another Special Session after the RegularSession. The fact is, our fiscal house is not in order, and through a series of cuts and revenue increases we have to stabilize our budget.
The Special Session did result in some savings, and in some new revenue measures. Nothing is simple, and none ofthis is easy. But, Louisiana will have more money because of these Legislative actions:
- Tax on a pack of cigarettes has gone up from 86 cents to $1.08. That means $11 million this year and $46 milliona year after that.
- Tax on alcoholic beverages has been increased.
- A flat rate for calculating corporate income tax liability has been set.
- A Constitutional Amendment to eliminate the deduction for federal income taxes paid on corporate state returns will be on the ballot.
- Sales tax on goods ordered online will be collected – the amount this will bring in is uncertain.
- State sales tax increases to 5 cents (and some special sales tax deductions were eliminated.) This will mean $215 million this year and $883 million annually.
- Reduced some discount rates for vendors related to alcohol and tobacco taxes, raising over $1 million next year, less this year.
- Reinstate a state car rental tax, will result in $800,000 this year and $5 million a year after this.
- Tax short.term rentals (AirBnB): the amount this will bring in is unknown.
- Renew a telecommunications tax: resulting in $900,000 this year and $3.4 million annually.
- Lessen a tax break for insurance companies, bringing in $8 million a year for the next two years.
The Regular Legislative Session, which started March 14 and will end on June 6, will have a much broader focus than fiscal matters alone, but we will continue to look for efficiencies to save tax payer dollars.
By law, there are not many places to cut funds when Louisiana lacks the revenue to pay for state priorities.
Unfortunately, education and health care are the areas where funding can most easily be reduced. As we all know, our colleges, community colleges and universities have suffered staggering budget cuts in recent years. Investing in higher education is always critical, but even more so in the competitive and now global economy our workers must compete in.With all our effort in the recent Special Session we have still put a burden on those schools to trim their own budgets.The University of New Orleans and Delgado Community College are both struggling to come to terms with this new reality. A suggested Constitutional Amendment to make adjustments to the role of the public postsecondary education management and the Board of Regents will be introduced.
This scholarship program for Louisiana students has grown exponentially over the years, now topping over $300million per year. This growth has made the program unstable. Already this year TOPS funding has been cut and the higher educational institutions where TOPS pays tuition are having to absorb the cuts when expected TOPS payments for this semester will not be made. There are several suggestions on how TOPS can be trimmed, perhaps setting a family income level so that needier students are the ones helped, or raising the standards so that students must have a higher score on the ACT exam to be eligible. This will be a hotly debated issue.
Most schools in New Orleans are charter schools, run by their own boards, but under either the Orleans Parish SchoolBoard or the state Recovery School District. Transferring schools back into the local system is a process that can, and should, be made more efficient, and rules for funding state system charters with local school board monies must be clarified. School boards should also be able, in special circumstances, to assign students to charter schools. At the same time, we need to expand education to younger children. A Constitutional Amendment would allow New Orleans voters to approve a tax to fund education for children from birth through three years. And, each child should have an annual wellness evaluation from kindergarten through sixth grade.
The Voucher system, in which the state pays money to private schools for tuition for children from low performing public schools, is one expense that, in this time of financial crisis, will be carefully considered for modification. And,creation of a Commission on Safe Supportive Discipline could improve our schools’ success in making sure that all students benefit from productive time in the classroom.
Governor John Bel Edwards has signed an executive order expanding Medicaid coverage to working families who earn under a certain threshold. This will bring in much needed federal match dollars to shore up our healthcare budget and provide critical access to healthcare for our workforce. This could save our state over $100 million in the first year alone. Some adjustments to agreements with the private entities overseeing our state’s health care system and hospitals will have to be made to reflect our state finances. A Medicaid managed long.term services and supports system needs to be created; a centralized human services transportation data system is also needed.
Railways will benefit from funds to be utilized for state rail freight service assistance, and renewal of the FreightRailroad Intermodal Grant Program.
- Costs collected on civil court filings will help fund the Judicial College, which provides continuing legal education for attorneys and judges.
- Constitutional Amendments will be introduced:
1. Providing for the applicability of the industrial tax exemption, and
2. Establishing the Revenue Stabilization TrustFund, and
3. Clarifying the taxing powers of regional flood protection authorities.
I continue to be truly honored to represent you in the Louisiana Legislature as State Representative for District 91 and as the Speaker Pro Tempore of the Louisiana House of Representatives. Thankyou for taking the time to respond to the attached Survey, it is extremely helpful and provides great insight into the needs of our district.
Walt J. Leger III
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