The issue
Currently, the state of LA has over $2 BILLION in non-recurring and recurring STATE funds yet unencumbered.
Based on Friday’s Revenue Estimating Conference (”REC”) meeting, it appears that STATE funds are still rolling in above the current level. (The REC does not estimate Fed funds.)
Governor Blanco has predicted the boom in STATE revenues to continue (recurring) for at least another 5 to 10 years.
What is the best use of these fund?
Background
From 1812 (LA became a state) until Governor John McKeithen’s second term in the early 1970s state government SPENDING rose to $1 BILLION.
From EWE’s “First Coming” through his “Fourth Coming” state government SPENDING rose from $1 BILLION to $10 BILLION in 1996.
During Big Daddy’s reign (1996-2004) state SPENDING grew from $10 BILLION to $15 BILLION.
In the first three years of Governor Blanco’s term, state SPENDING has risen from $15 BILLION to over $27 BILLION.
Results of spending
What did we get for all the spending?
LA remains at the bottom of all positive categories and at the top of all negative categories when compared to the other states.
A fork in the road
When LA state government takes in more money than it expends, it is not required by the state constitution to spend the money. The constitution does limit the amount of additional spending. However, it imposes no limits on how much money can be returned to the taxpayers.
During the upcoming 2007 Regular Session, there are decisions to be made: 1) Spend all the revenues expanding government or 2) Return the money to the people, and expand the private sector.
The political decision seems simple; directly benefit a few hundred thousand people who work directly and indirectly for government at the state and local (teachers, policemen and firemen) OR benefit all 4.2 million people living in the state.
A solution
Nobody asked, but nobody has presented a plan either, so here are some suggestions for returning the money to the citizens of LA
These suggestions will not shrink state government despite the loss of over 200,000 of our citizens. They merely slow the exponential growth in state spending that we have witnessed in the last two decades. These suggestions will generate even more money for state and local government through additional consumer spending.
All of these suggestion only require a MAJORITY vote of the lege.
1. ELIMINATE THE STELLY PLAN PERSONAL INCOME TAX INCREASE — $238 MILLION.
2. ELIMINATE THE ENTIRE CORPORATE FRANCHISE TAX (Not just the tax on debt) — $200 MILLION.
3. ELIMINATE THE ENTIRE CORPORATE INCOME TAX — $250 MILLION
4. ELIMINATE THE ENTIRE STATE SALES TAX ON BUSINESS EQUIPMENT PURCHASES; (not just on manufacturing equipment) — $450 Million
5. REPEAL THE STATE 3.8% TAX ON BUSINESS UTILITIES — $100 MILLION
6. REDUCE THE STATE SALES TAX FROM 4 CENTS TO 2 CENTS — $1.3 BILLION
7. ALL OF THE ABOVE — $2.26 BILLION
8. MIX AND MATCH $__________MILLION/BILLION
Your suggestions?
The result of the suggestions above will be to “invest” the extra money directly in the pockets of the citizens of our state. If state government, in the future, develops needs for additional money (above which will be generated by “re-investing” this money into the economy), then by a two-thirds vote of the lege to reimpose any or all of these taxes. At least we all get a brief “tax holiday.”
Think Tanks, Governor Blanco, leges, the media and all others with a stake in LA’s future, if you don’t like these ideas, come up With your own.
Please don’t a lot of your energy, shooting the messenger and telling us why these suggestions cannot be done. Just sitting in the Bank, the money is only helping a few banks.
C.B.
Uncategorized
CB
8:00 am
