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Times-Picayune Letter to the Editor: Louisiana is Already Squeezing Taxpayers Enough | The Pelican Post










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Times-Picayune Letter to the Editor: Louisiana is Already Squeezing Taxpayers Enough

Budget, Featured — By on April 29, 2011 11:41 am
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Louisiana government spending increased by 150 percent over 20 years

In their guest column of April 9 (“Cigarette tax increase is good public policy”), Edward Ashworth and Andrew Muhl argue in favor of increasing the state’s cigarette tax. The authors claim that this tax hike would be overwhelmingly popular, but Gov. Jindal opposes it for reasons of political expediency. These claims appear contradictory, but the problems with their argument do not end there.

The authors allege that our budget crisis is driven by a lack of revenue. In fact, Louisiana’s government spending increased by approximately 150 percent between 1987 and 2007, on a per capita basis and adjusted for inflation. Not only is such growth unsustainable, but it has failed to deliver benefits commensurate with the costs.

At some point, we are forced to confront reality. To borrow from Margaret Thatcher, “Sooner or later you run out of other people’s money.” Putting the squeeze on smokers might delay the inevitable, though it is worth noting that revenue projections for cigarette taxes tend to be extremely optimistic. In any event, to blame Louisiana’s problems on tax cuts overlooks the massive increase in government spending.

The authors tout the wonders that another $250 million would bring. Several of the items in their grab bag are of dubious value, but perhaps we should start with a simple question: Does anyone believe we are getting enough for the $25 billion we are already spending? Health care and education outcomes simply do not support the case for throwing more money at problems that have resisted the best efforts of central planners. To say nothing of the fact that we would have a more robust economy if less money was taken from the private sector. Given these facts, voter skepticism to higher taxes and more spending is understandable.

It is notable that the areas where we have seen real improvement, such as charter schools in New Orleans, do not owe their success to increased spending. Instead, innovators have been given the freedom to operate with fewer bureaucratic obstacles. Applying these lessons to other failing programs would do more good for our state than relying on revenues from a dwindling demographic.

This article originally appeared in the Times-Picayune on April 29th, 2011

Kevin P. Kane is president of the Pelican Institute for Public Policy in New Orleans.

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