This year marked the first time I attended the opening of a legislative session as Louisiana’s State Treasurer. As I looked around the House Chamber, I thought two things. First, I do not envy the tough task lawmakers have ahead of them. Secondly, it is not yet clear what direction lawmakers will take to change the state’s tax code or reform the budget process.
Although it’s a daunting undertaking, getting control of the state’s budget has never been more important. State government has been addicted to one-time money and budget gimmicks for years and has had a problem living within its means.
Louisiana’s fascination with quick money fixes is similar to an individual who depends on payday loans or credit card cash advances for recurring expenses. It’s a never-ending cycle of scrounging up money to make payments, higher interest costs, and instability. You may convince yourself that you’ve met your needs in the short-term, but a few months or years in, and you’re headed for serious, long-term financial problems.
Wall Street has taken notice of the state’s precarious budget situation. All three Rating Agencies downgraded our bond rating in less than two years. Standard & Poor’s was the latest agency to do so, downgrading us one notch in March from AA to AA-. Louisiana’s budget struggles and supporting revenue problems were factors in the downgrades.
Louisiana simply cannot continue down this road and ask hardworking families to pay more taxes without first making a good faith effort to live within the constraints of a real, workable budget. We should have learned by now that throwing money at the state’s problems won’t make them go away. It may mask the trouble for a little while, but things always seem to catch up to us in the end.
If state government needs advice on crafting a workable budget, I recommend that they ask a Louisiana family for advice. Most families know how to set aside money for an unexpected roof leak or ER visit. They know the importance of paying their bills on time each month. They also know better than to mortgage their house to pay for the latest video game system for their kids. They’re making common sense decisions on how to spend their income.
There are things the average Louisiana citizen can do to ensure that state government does the same thing. It’s never been easier to stay informed during the legislative process. The Louisiana Legislature operates a terrific website where you can research bills, monitor the budget, and watch committee hearings online at www.legis.la.gov.
Taxpayers can also monitor how much money state government collects by checking the Louisiana Department of Revenue’s net receipts report each month. The Treasury posts this report monthly on our homepage at www.latreasury.com.
There is no doubt that we have a lot of work ahead of us. We know Louisiana has a problem. Wall Street knows Louisiana has a problem. But we also have an opportunity to put pencil to paper and come up with a responsible budget that everyone understands and clearly spells out where tax dollars are going. Like Louisiana families, state government must seek to stay within its fiscal means. Louisiana taxpayers deserve no less.