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‘Business Report’ Publisher: Louisiana can’t afford populism anymore


April 12, 2017
By Rolfe McCollister
Originally Posted on Greater Baton Rouge Business Report

Government has an insatiable appetite and never seems to get enough money to satisfy its hunger. “More, more, I need more money!” And maybe that’s because 1) politicians get to have more power and be more popular when they have more money to give away, and 2) many liberal and populist politicians and citizens believe bigger government is the solution to every problem, which has created an entitlement mentality. (Starting new government programs and giving away money is a better way to get re-elected than cutting programs and taking services away.)

I believe this has made Louisiana and America weaker, not stronger. Instead of our national and state governments simply focusing on their roles to protect and defend, educate (and that is not a national role), build infrastructure and provide justice, many seem intent on going far beyond that and creating a “nanny state” where government is supposed to take care of a litany of everyone’s needs. Instead of a limited government that supports the individual’s pursuit of the American dream, with all the freedoms and rights in our Constitution, these folks suggest you just lay down and rest, and dream about what else government can do for you.

Wake up! That is a nightmare for our country’s future—and certainly not the way our parents and grandparents built the greatest nation on earth. But what are we going to do about it in Louisiana? Do we give in to the idea that a bigger government is the key to overcoming our future challenges? I think not.

Louisiana Association of Business and Industry President and CEO Stephen Waguespack doesn’t think so either, and he recently criticized Gov. John Bel Edwards’ recent plan to raise taxes.

In a column titled “The Same Old Game Plan,” Waguespack compares the Edwards plan to the “Huey Long model”: “Sending our hard-earned tax dollars to the state capitol each year in the hopes it will lead to good schools, dependable roads and a stable economy has proven to be a bankrupt game plan that must be replaced.

“Texas doesn’t do that. Taxpayer dollars stay closer to the people, counties are tasked with taking a leadership role and the state capitol of Austin is there to assist when needed rather than play kingmaker to the state and its people.”

He notes that Florida, Tennessee and Georgia all have a similar model to Texas—and all have grown faster than Louisiana since the 1980s recession.

It’s the same problem we have with spending in Washington, D.C., with its $20 trillion deficit. Why should our local money all go to the Capitol to be redistributed? (Because the politicians enjoy the power of the purse, that’s why.)

“We are still trying to put lipstick on the pig created by Huey and enshrined in the Constitution by Edwin,” Waguespack says. “The latest edition of the lipstick is the 2017 version of let’s blame business and the working class for government’s perennial problems.”

Some points from Waguespack’s column:

The governor has proposed a new $1 billion gross receipts tax on business.

Only five states levy this tax, and four states have repealed it in recent years due to the pyramided costs, disincentives to entrepreneurship and disproportionate harm to in-state small and medium-size companies.

Louisiana has lost 25,000 jobs since the recent peak of the economy in 2014 (many in oil and gas).

The state is getting $1.3 billion more in taxes this year than last year.

The TOPS program to keep the best and brightest in Louisiana has had funding reduced and is only partially funded in the new budget.

The new budget is $4 billion larger than when Gov. Edwards took office.

Edwards, a populist like Long and the “other Gov. Edwards,” claims that businesses need to pay “their fair share.” As Waguespack points out, businesses pay most property taxes, individual and corporate taxes, half of all the sales taxes (highest rate in the nation), franchise tax (which most states don’t have), severance taxes and gas taxes. He states that the governor’s position on fair share is “patently false.”

The battle is on this session, and it is about more than just money. It’s about a philosophy and the role of government, too—and what we can afford to continue doing. As I stated in a recent column, our history has proven that patronage and poverty in Louisiana have both been very expensive. (So has our generous pension system, which needs reforms.) Our wagon has grown too large, and there are too many that have become comfortable riding in it. If some folks don’t like having to start pulling the wagon, then they should search for a state that will let them ride for free. (Try California.)

I am convinced those days have come to an end in the Bayou State, as our wagon is overloaded and has broken down. Our load is simply unsustainable, and we need to build a new and much smaller wagon we can afford to pull in the future. And we won’t build it running off businesses who create jobs and taxpayers that pull the wagon. That’s dumb.

I will say again, populism may have been good for political careers in the past, but the chickens in our pots have come home to roost. Louisiana simply can’t afford populism anymore. It’s a new era, and most people I know are fed up with what government wants. Tell the governor and Legislature what you want done now—or we will all continue to pay more later.

GOVERNMENT REGULATION

If you don’t think more government matters, just take a look at the impact more government has had on banking. Across our nation there are far fewer community banks, due in part to the burdensome and costly regulations and compliance orders from the federal government. In 1990, there were 15,158 banks in America. Today, there are 5,894. That is a 61% reduction in banks. Did you use to have a job at one of those banks? Did you bank at one of those institutions for years, one where they knew you and maybe your parents, too?

There is a real cost to regulation and often unintended consequences. Sometimes our government should just stay out of the way.

This just proves that laws, regulations and elections matter, and a candidate’s view of the role of government is a critical factor. Don’t forget to ask.

GOVERMENT SHAM

Rep. Paul Hollis, R-Covington, has a bill to put an end to red light cameras at intersections. He told WAFB-TV, “It’s got little to do with safety and everything to do with the money grab, because that’s all I think the traffic cameras are.” WAFB noted that last year Baton Rouge took in more than $2 million from traffic camera fines.

But they also revealed an LSU study that showed that since 2008 when the cameras were installed, accidents at intersections have increased. And many of those who do get the citations never pay them, and there is no way to enforce the law. So, only the “honest folks” get punished. What a just system.

It’s time to get rid of the cameras and this sham put on by our local government.