Stephen Waguespack
There has been a consistent drumbeat of late dominating the airwaves sung by a chorus of politicians, interest groups and talking heads … they want fiscal reform and they want it now.
Of course, they do. Don’t we all? I mean, who in their right mind would oppose something called “fiscal reform?” Just the very mention of it causes us to visualize a day when all Louisianans can finally live in the job-creating, budget-balanced society we have long pursued.
Yet, too many in the fiscal reform chorus have yet to specifically state how they define it. Time is running short and voters are starting to demand more details.
Which specific taxes do they want us all to pay … what specifically will they do with the money … and what specifically will they do to reduce the cost of government? These details matter and it’s time for the chorus to get specific. Trust in government is at an all-time low and generic sound bites are not going to cut it this time.
With this reality in mind, here are a few suggestions for the chorus to ponder should they decide to get specific with taxpayers:
First, keep it simple. The goal is to design a simple, flat and fair tax code. Remove exemptions and credits where sensible and lower corresponding tax rates accordingly. Fewer loopholes in the code will give more consistency. Don’t remove them just to fund more government spending that we already can’t afford.
Second, don’t start a book burning. Not every spending program is bad. Not every tax is harmful. Not every credit, exemption or exception should be repealed. Be strategic with the analysis and focus on what will make it easier for people to live, work and invest here.
Third, touch the Medicaid hot stove. Enough with the debate over Medicaid expansion. That decision is made. Start talking about how to reform it, snuff out fraud, incentivize the responsible use of it and promote a pathway to get off it. Putting people to work in stable, quality jobs so they can one day get off Medicaid is better than just casting the net wider and wider each year.
Fourth, touch the pension hot stove. Louisiana must reform our pension systems and start making them more affordable. We assume unrealistic rates of return that will threaten the program’s viability for future generations. Also, there are simply too many recent examples of high-profile government workers stepping down for big pension paydays that seem unfair to lower paid workers in the private (and public) sector. This erodes trust with the taxpayer. The world has changed, our pension systems must also change.
Fifth, reform the budget structure. Just as Buddy Roemer did in 1987, unlock many of the dedicated funds and make those dollars eligible for expenses like education and health care. Eliminate unnecessary boards, commissions and other fiefdoms that add extra costs and regulatory hurdles. Demand higher performance from higher education programs in terms of helping our kids get Louisiana jobs. Reward programs that do it well, eliminate those that don’t.
Sixth, embrace transparency. Put every contract and dollar spent in government online in an easy to understand manner. This includes local government and the judiciary. You cannot rebuild taxpayer trust in government without this step. Look to ohiocheckbook.com to see how it can be done.
Seventh, start draining the swamp. You can only fix the house that Huey Long built by slowly draining its power. Taxation closest to the people is most accountable. Slowly evolve to a system where people pay more of their taxes local and less to the state. The Kingfish method of sending all our money to the Capitol and hoping it trickles back down in the form of good schools, roads and jobs clearly is long past busted. Copy Texas in this way by making parishes more accountable for helping solve problems and give them some tools to do it.
Eighth, attack corruption with everything you’ve got. There are too many headlines of local and state government dollars being misspent. Problems with the management of our major cities reflect poorly on all levels of government.
Ninth, collaborate more … pontificate less. Everyone is tired of elected officials who only know how to argue and fight. If everyone is going to sacrifice some to get compromise, then the good vs. evil narrative must end. Neither liberals nor conservatives are immune from criticism or blessed with all the right answers.
Tenth, fix the economy. New incentives aren’t needed, it is more about creating a culture of growth. Start by stopping the bad stuff. Stop pushing government lawsuits as the way to fix everything … stop trying to tear down bipartisan school reforms … stop changing the tax code every six months … stop the anti-business rhetoric that drives away investment …s top ignoring infrastructure needs and propose a funding plan that taxpayers can trust … stop disincentivizing personal responsibility by throwing government at every problem.
Look, everyone supports fiscal reform. No shocker there.
But for true fiscal reform to happen, elected officials must be honest with the people and get specific with the details. Lost trust can be rebuilt, but it starts with fewer sound bites and more sound policy.
Stephen Waguespack is president of the Louisiana Association of Business and Industry.