By John Kennedy, State Treasurer
I have a radical suggestion for you. Let’s pretend that we have a time-traveling DeLorean parked at the State Capitol and go back a few years.
Specifically, let’s go back to 2015. Liquid water was found on Mars. The Brits got a new royal baby. And, in fiscal year 2015, the state general fund was $8.6 billion.
The state general fund is basically the state’s main checking account. It’s how income is deposited and the bills are paid. For the most part, the state general fund doesn’t change a lot from year to year unless we’ve had a hurricane or a similar disaster that results in people rebuilding their homes and replacing their cars. Post-storm years puff up the general fund, but they’re blips.
The state general fund for next fiscal year – the state’s budget year runs from July 1 to June 30 – started at $8.2 billion. Then legislators, at the governor’s behest, raised taxes $1.3 billion. Everything from that cold beer you drink after mowing the grass to the Girl Scout cookies you buy from the neighbor’s kid is going up in price.
But the governor’s not done. He wants the general fund to stand at $10.2 billion, requiring an additional $750 million in tax increases or maybe it’s an additional $600 million in tax increases. The amount of money needed keeps changing. The target stays the same, though. The governor is insistent on a state general fund of $10.2 billion.
State government spending in Louisiana is becoming a super-sized meal at a fast food restaurant. No one needs the quantity, but we keep increasing the size. Enough is enough.
Now I’m aware that health care costs are increasing. I’m aware that the oil industry is in a slump. I’m aware that the previous administration chronically underfunded the state and inked privatization deals that were poorly constructed.
None of that gives us an excuse for increasing our state general fund spending from $8.6 billion to $10.2 billion in a two-year span. If you think I’m wrong, ask the average family in Louisiana if its income has risen nearly 20% in the last few years.
The U.S. Census Bureau does a lot with facts and figures. Often times, the results are sobering.
For example, the 2014 report on Income and Poverty in the United States showed that the annual change in median household income wasn’t statistically significant for three years running. It gets worse. Real median household income was lower in 2014 than it was in 2007.
You’re probably not getting a raise every year. You’re probably not even getting a raise every other year. In fact, you’re having to stretch the dollar so far that George Washington’s face is looking a little threadbare.
Our middle class is stagnating. That’s sad but true. If the working middle class of Louisiana and America is living on the same income year after year, then state government should do the same.
