Louisiana Tax Bills Passed, But Revenue Woes Remain
The Louisiana legislature has endorsed Gov. Buddy Roemer's proposal to revamp the state's tax structure.
State and local education officials warned, however, that the measures approved at the end of a special legislative session last week do not provide the additional revenue Mr. Roemer needs to fulfill his promise to raise teacher pay by 7 percent.
In addition, they said, the Governor also must come up with funds to begin a voter-mandated bailout of the state's retirement system, bringing the total shortfall to as much as $200 million.
Mr. Roemer will present the legislature with a budget for the upcoming fiscal year shortly after its regular session begins next month.
Overcoming lawmakers' initial opposition, Mr. Roemer won approval during the special session for his plans to increase income taxes, revise some sales taxes, and cut taxes on businesses.
But even if the package of bills is approved by voters in an April referendum, the state's revenue levels would remain the same because other state taxes will expire this year.
According to Stephanie Desselle, the Governor's education aide, Mr. Roemer will have to slice "about $100 million" from the spending plan he will present to lawmakers in order to supply funding for the teachers' pay raise.
If voters reject the tax-reform package, "our budget will reflect over $600 million in reductions," said Ms. Desselle. "We'll just have to start over with what we've got left."
Failure to fund the raises for teachers "would be absolutely disastrous," said Jeff Simon, a spokesman for the Louisiana Association of Educators, the state's largest teachers' union.
He noted that, for the first time, teachers are being drawn to work in neighboring Mississippi, where Gov. Ray Mabus has substantially increased teacher pay. "Even some of the better-paying parishes are beginning to see shortages of teachers and problems in recruiting," Mr. Simon said.
Finance Plan Shelved
In order to cope with the looming deficit, Mr. Roemer has shelved the idea he proposed last year of shifting responsibility for some $300 million in transportation and utility costs to school districts, Ms. Desselle said.
The Governor decided to postpone any changes to the state's minimum school-foundation program "because there was a serious lack of confidence" in the plan among local school officials and legislators, Ms. Desselle said.
The Governor will instead aim to "to try some other things on education finance," and will meet soon with state and local education officials to discuss funding alternatives, she said.--pw