The Natchitoches Area Chamber of Commerce held a 2018 Legislative Issues Luncheon July 18 at the Natchitoches Regional Medical Center.
Louisiana Association of Business and Industry Stephen Waguespack moderated the panel. He began with a brief overview of the four legislative sessions held this spring. According to Waguespack the fiscal cliff Louisiana is facing dominated the sessions.
A special session held in February adjourned with a $994 million hole in the budget and without the legislature passing anything. The deficit dropped to $648 million by the regular session in March because of a federal tax cut passed by the president. This session too ended with no solution and no approved budget.
A second special session in May passed a budget. It also passed a bill creating louisianacheckbook.com, a website allowing the public to oversee the government’s spending. While a lot of debate revolved around a sales tax, the session ended with no funding solution. A third special session in June was called to address an anticipated $641 million revenue shortfall resulting from the expiration (June 30) of a temporary one penny sales tax. Passing a bill to renew .45 of one penny (generating $463 million for the state budget starting July 1), will fully fund TOPS, higher education and healthcare (with a two-year time stamp).
Luncheon sponsors were given he opportunity to ask questions of the three panelists: State Senators Gerald Long and Jay Luneau and State Representative Lance Harris.
Alliance Compressors asked the panelists what they see will be protected going forward regarding businesses and state taxes?
Long: Home utilities, prescription drugs and food aren’t taxed at the state level. Cumulatively, businesses and individuals receive $8.9 billion annually in exemptions and credits (like the $75,000 homestead exemption). Seventy percent of all businesses in the state fire 75 or fewer employees. We have to keep modeling what good practices look like to protect small businesses. Many of our exemptions/credits are 30-40 years on the books. We need to be better business mangers and better stewards of what we have.
Luneau: I think we could do away with 90 percent of the exemptions and credits we give across the state. Businesses need to know what their taxes are going to be from year to year. We need a fixed rate that’s lower. Louisiana has the highest amount of credit/deductions in the nation. We have too many. It’s gone too far. We need to be effective at attracting businesses but we can’t give away the farm. We need to be careful about how we do it.
Harris: We need to look at the exemptions that really add to our economy. The movie tax credit is the worst deal we have. We lose 82 cents of every dollar we spend.With MNE tax credits or other business incentives, companies will build brick and mortar plants. I’m in favor of these types of exemptions. We need to get out of the last 90 years of thought and look toward a future to attract business.
Exchange Bank knows that the Natchitoches is a college town and the Chamber has prioritized K-12 education. It’s questions was how does Louisiana achieve consistent, more robust funding for higher education?
Long: I think we spend far too little on education. It’s the driving force and what would Natchitoches be without Northwestern State University? This is an extremely poor state and if we’re gonna move it forward, we have to start with preK and Kindergarten. We need to figure out how to put more into it, so that it will produce future dividends.
Luneau: Facilities across the state are dealing with deferred maintenance and there’s a lot of issues they can’t afford to fix. We have created this system. NSU has old HVAC systems and Grambling had to close its library because of black mold. Some people say we have too many colleges and universities in the state and LSUA and NSU are at the top of the list for suggested closures. I don’t want to see them close. We have to balance our spending issues. We are one of the poorest, sickest states in the US, which is why we spend so much on LDH. Medicaid expansion created over 19,000 jobs, much like some of the jobs at the NRMC. I think it’s a good investment for what we do. The LDH is one of our biggest employers in central Louisiana.
Harris: We have to deal with the $3.2 billion in discretionary spending we have now. Some thought needs to be given to spending reform. K-12 and higher education are priorities. The way the budget is set up we have this thing called LDH (Louisiana Department of Health). A lot of the budget is being eaten up by Medicaid and it increases each year. We need to make sure the money the state receives is spent adequately on the right priorities. It’s critical we have health services, but it’s also critical we fully fund higher education.
Waguespack asked the panelists what their perceptions are of how the state manages the growing Medicaid program?
Harris: A legislative audit report said the program is being run in a “willy nilly” fashion. That’s scary for a $14 million department. The Medicaid program is expanding too fast for the economy to keep up with. Let’s deal with it in the most efficient way we can and keep looking at reforms to try and change it. The program will continue to grow and eat our state general funds. That’s the No. 1 problem we’ll face in the future.
Luneau: I serve in the Louisiana Adult Advisory Council and the Health and Welfare Committee. A federal audit said we’re third in the nation. It’s interesting that Louisiana’s chief auditor said the state is in a horrible position after a bill failed that would’ve given him more power. There’s fraud on the provider and recipient side of healthcare. The federal government told us the level of fraud is within the realm of what is acceptable. The question is then, what do we do?
Harris: CMS (Centers for Medicare & Medicaid Services) estimate Louisiana had $1.5 million in fraud.
Long: This program is benefitting so many people that have no chance. However, we need to control the cost of everything. The original funding for TOPS was $60 million. We spend almost 7 times that today. Many people in Natchitoches are receiving quality healthcare. We have a moral responsibility as a state to protect our people.
Lyft asked the panelists if they will vote to allow the expansion of access to ride-sharing services next year after it didn’t make it through this years sessions. Each panelist said they would as long as some issues were addressed. The companies want legislation that gives them a lot of protection. Panelists believe companies like Uber and Lyft are seeking special treatment while trying to skirt rules and regulations for taxi cab operators, who are regulated by the Public Service Commission.
If you could pass one bill with a magic wand what would it be?
Long: Something that would allow us to look at a new constitution. Since it was revisited in 1975 we’ve made 250 amendments. There’s some issues we need to address if we’re going to move forward as a state.
Luneau: Tax reform.
Harris: A spending limit bill for the state budget. We cannot sustain the level of spending we’ve had in the past because the private sector and public economy cannot pay to keep up with it.
NRMC President and CEO Kirk Soileau asked the panelists what efforts the legislature will make to improve public discourse and the divide between parties?
Long: I don’t want Baton Rouge to look like Washington DC. Unfortunately, it’s begun to look more like it. I believe in balance. We can pick and chose the items we believe in. If all I have is an “R” behind my name, I was put there for the wrong reason. It’s imperative we find common ground. We’re not there because of who we are but because the people thought we could be the best representatives for them.
Luneau: I detest partisan politics. I vote on issues the way I think my constituents want me to vote. A lot of times the votes are more philosophical, like minimum wage. If we don’t stop partisan politics we’ll soon find ourselves in a serious situation.
Harris: Partisan is something the press just loves to drum up. I see it as two philosophies at work. We get to Baton Rouge to duke it our very transparently. Look at criminal justice reform. That was non-partisan voting. Partisan voting gets brought up when I refuse to roll over and vote for someone’s bill. I’m being true to what I was elected for. It all gets resolved in the end. Maw Maw doesn’t get kicked out of the nursing home and we have college football because of legislative debate.
Other representatives present at the luncheon included:
Stephanie Mackenzie from US Senator Bill Cassidy’s office
John Barr from US Senator John Kennedy’s office
Lee Turner from US Senator Mike Johnson’s office
Mayor Lee Posey
Parish President Rick Nowlin