Over chicken and sausage gumbo at a steakhouse in southwest Louisiana, Gov. John Bel Edwards reflected recently on how much national partisanship had spilled into his state. He was preparing to give a string of presentations on the state budget and why Republican lawmakers needed to pass new taxes to replace expiring ones, a tough proposition for the only Democratic governor in the Deep South. His efforts to persuade them last year failed spectacularly.
The blue-red divide in Louisiana is less fraught and dysfunctional than in Congress. Republicans still allow Democrats to chair some legislative committees. It may take longer to pass a budget than it used to, but it happens. And the government doesn’t shut down. But there has been noticeable ideological creep. “It is certainly more like Washington than it was 10 years ago,” Edwards says. “There’s a group of folks in the legislature, primarily in the House, who I genuinely believe their No. 1 mission is to oppose what I propose and try to ensure that I’m a one-term governor. That’s more important to them than dealing with the problems that the state has.”
Louisiana politics remains idiosyncratic and unpredictable, as it has been since the days of Gov. Huey P. Long nearly a century ago. Edwards’ own election is evidence of that. He wouldn’t be governor today if not for allegations that his opponent, then-U.S. Sen. David Vitter, had hired a prostitute in the early 2000s. But Vitter’s missteps don’t fully explain the upset, which owes as much to Edwards’ reputation as a personable family man and devout Christian who had worked with Republican leadership for six years while chairing the Democratic Caucus in the Louisiana House of Representatives. A recent book about the 2015 gubernatorial campaign is aptly titled Long Shot, capturing a sentiment shared by some Democratic Party leaders who were slow to support the small-town lawmaker with little name recognition outside the state capital. After U.S. Sen. Mary Landrieu had lost her reelection bid a year earlier, conventional wisdom held that Democrats, even careful centrists, couldn’t win statewide office in Louisiana anymore. But Edwards didn’t buy it.
Now 51 years old, Edwards grew up in a rural town with fewer than 5,000 residents, married his high school sweetheart and raised three children. Before getting a law degree, he graduated from West Point and served eight years in the Army, eventually becoming a captain. He is an unapologetic advocate of gun rights and an avid hunter. He also hails from a family of elected sheriffs, and supported legislation to make targeted violence against law enforcement a hate crime. As a Roman Catholic, he is also pro-life -- another example of his Democratic heterodoxy -- and he and his wife chose to disregard their doctor’s advice to have an abortion when they learned that their first daughter would be born with a congenital defect that could leave her unable to walk.
As a candidate, though, Edwards championed many traditional liberal causes, such as raising the state’s minimum wage, expanding Medicaid and changing the state’s criminal justice system to incarcerate fewer nonviolent offenders and help ex-convicts find jobs. (Louisiana has a higher percentage of residents incarcerated than any state in the country.)
Edwards, who is not related to former Gov. Edwin Edwards, believes his electoral success two years ago points the way for Democrats to win back control of Southern states that have become reliably red over the past decade. “If we want to be a 50-state party, we have to appeal to people where they are,” he says. “I think there are some in my party who believe that the current dysfunction in the Republican Party and the low approval ratings of our president means that we’re going to automatically be successful going forward. I reject that idea. It means that we have the opportunity to be successful. But we have to go out and seize the middle of the political spectrum. You don’t get it by simply not being a Republican.”
Right now, however, Edwards is preoccupied by a crisis more immediate than the national future of his party. His state has been plagued for several years by massive budget deficits, and 2018 is no exception. A temporary one-cent sales tax is set to expire at the end of June, creating a $1.6 billion shortfall in a budget of less than $30 billion. This month his office will submit a budget request to state lawmakers that outlines hundreds of millions in spending cuts, mostly from higher education and health care. “They won’t be cuts that we want,” he says.
The budget is not only the central challenge of his administration, but also the biggest test of whether Edwards can govern from the middle as well as he campaigned. To quarterback budget negotiations, he appointed a Republican and former rival, Jay Dardenne, as his commissioner of administration. Dardenne was on the state Senate Finance Committee for eight years and served as both Louisiana’s lieutenant governor and secretary of state before losing in the GOP gubernatorial primary. Several other senior officials in the Edwards administration are either Republicans or former appointees under a Republican governor. “I told people we would have a state government that looks like the state of Louisiana, and that’s true of men, women, black, white, Hispanic, but I also meant that in terms of party,” Edwards says. “I want to fashion solutions in the political center, and it’s important to me to have a Republican sitting at the table every time we make a high-level decision.”
Last year, Edwards, Dardenne and Secretary of Revenue Kimberly Robinson crisscrossed the state making a pitch to local elected officials and business leaders about how to avoid the fiscal cliff. They framed their proposal as a modest request to keep Louisiana government at its current size, which is already much smaller than it once was. The state brings in about $1 billion less in revenue, they said, and has roughly 30,000 fewer employees, than it did a decade ago. It’s a point the governor keeps making every time Republican critics insist he should focus on further spending cuts, not on raising revenue. “This notion that this governor has come in and wants to raise revenue and spend money willy-nilly is not correct,” Dardenne says. “This not a wild-eyed liberal Democrat. This is a conservative Democrat governing in a conservative state.”
Edwards appointed Jay Dardenne, a Republican and former rival in the governor's race,as his budget chief. (AP)
In his first two years, Edwards has had mixed success in turning his campaign priorities into reality. He expanded Medicaid for more than 433,000 low-income residents and signed into law his package of bipartisan criminal justice changes. At the same time, his proposals to raise the state minimum wage and close the gender pay gap have not garnered widespread support in the Capitol. Courts have thrown out his executive order issuing anti-discrimination protections for LGBT state workers. Nonetheless, he still enjoys respectable support from voters in a red state. A national poll in November found that despite political setbacks and continued trouble addressing long-term structural issues in the budget, he had a 53 percent approval rating. “He’s shown good leadership through some of the incidents that we’ve had with floods and police shootings,” says Barry Erwin, president and CEO of the Council for a Better Louisiana, a nonpartisan think tank and advocacy group. “In the public, even though he’s a Democrat in a very red state, he’s very well thought of.”
Erwin gives Edwards credit for producing more accurate budgets that highlight ongoing imbalances between revenues and expenses. “The budget that they’re presenting now is much more transparent than it used to be,” Erwin says. “There were a lot of gimmicks in the old ones. A lot of smoke and mirrors.”
But shifting the conversation from an honest assessment of the current budget to potential solutions has proved elusive. The governor and legislature have resorted to Band-Aid approaches, Erwin says. “It’s been much more of a challenge to craft a permanent solution and we don’t have one.”
By now, the legislature was supposed to have addressed the fiscal cliff. In 2015 and 2016, it enacted a series of temporary revenue increases, raising taxes on cigarettes, alcohol, hotel rooms and car rentals, in addition to a short-term increase in the overall sales tax. Lawmakers gave themselves a June 2018 deadline for replacing the $1.6 billion raised through those temporary fixes, which both Democrats and Republicans considered imperfect solutions. Democrats didn’t like the regressive nature of the sales tax, which disproportionately burdens low-income residents. Republicans didn’t like the fact that Louisiana has one of the highest combined state and local sales tax rates in the country. The three national credit rating agencies, which all downgraded the state in Edwards’ first year, have also criticized the failure to find a sustainable source of revenue for ongoing expenses.
When the legislature bought itself time to avoid the shortfall, Republican leaders also created an independent task force to study the budget and make long-term recommendations. Within six months, the 13-member working group, stocked with a mix of bipartisan appointees, produced a list of tax proposals. Their report included more than a dozen ideas, such as removing a sales tax exemption for business utilities and eliminating state deductions on federal income taxes paid by individuals and corporations. As the state does away with some tax breaks, the report said, it can also lower its general sales and income tax rates.
The task force issued its final report in time for the 2017 legislative session, which was dedicated to budget and tax issues. When lawmakers originally convened the task force, they intended to use its recommendations as the basis for bills they would consider and pass. Every proposal did wind up in someone’s legislation, but none of them made it out of committee, and the legislature adjourned without a tax deal in place.
Senate President John Alario, a Republican and Edwards ally, suspects the state will have to raise taxes to plug the shortfall. (David Kidd)
Even before the task force presented its findings, one of its early supporters defected. Then-state Sen. John Schroder, a Republican who sponsored the bill that created the task force, sent a letter complaining that the group was too focused on raising money rather than reducing expenditures. Indeed, the report concluded that a reduction of more than $1 billion in spending wasn’t realistic. It did say the legislature should review existing contracts, tax breaks and funds protected by the state constitution to see if any could yield savings. But as Schroder said, the task force focused on specific remedies for replacing expiring tax revenue, not ways to shrink the budget.
Schroder, who is now the state treasurer, is following the playbook of his predecessor, current U.S. Sen. John Kennedy. As treasurer for 16 years, Kennedy argued that the state government spent too much money on consultants and managers and needed to live within its means. “We don’t have a revenue problem,” Kennedy wrote in one op-ed. “We have a spending problem.” It’s likely that Schroder will echo those sentiments again this year if lawmakers consider a tax package to stave off cuts.
This year, though, lawmakers can’t consider tax bills unless Edwards calls a special session, which he won’t do unless he hears from Republican House leaders that they have a plan. The budget his office will present at the end of January is likely to show politically unpopular cuts that both the governor and lawmakers will actually want to avoid.
Last year’s lack of progress highlights one of the key problems Edwards faces in attempting to score bipartisan wins. Ever since the days of Long, the legislature has allowed governors to pick the House speaker, who in turn chooses committee chairmen. This tradition meant that even when Democrats controlled the legislature -- a reality for most of the 20th century -- Republican governors had powerful influence over House leadership, and stood a good chance of seeing their agenda passed. Edwards expected the same deference, picking Democratic House Rep. Walt Leger III of New Orleans for House speaker.
House Republicans blindsided the new governor by electing their own candidate. GOP lawmakers said it was a long overdue step in establishing their independence from the executive branch. It was also a sign that Louisiana’s distinct political landscape, which has been defined less by partisanship than by race, geography and personal showmanship, was falling prey to partisan tribalism emanating from Washington. With a Republican speaker, the Louisiana House has become a roadblock for Edwards, especially on the matter of raising taxes, which requires a two-thirds majority vote. A minority of House Republicans who are ideologically opposed to raising taxes on almost anything wield considerable power over budget decisions.
Edwards entered office facing the steepest budget deficit in Louisiana history. The state’s financial problems were due in part to declining gas and oil prices, which resulted in revenue collections below state forecasts. But Democrats and Republicans alike lay much of the blame on former GOP Gov. Bobby Jindal, who pledged not to raise taxes or fees during his eight years in office, and mostly stuck to his promise. By his final year, the only way Jindal and the legislature could avoid raising revenue was by using one-time fixes, such as raiding rainy day funds and selling off parking lots, farmland and other assets. The Jindal administration also balanced its final budget by delaying Medicaid payments and underestimating the number of people projected to use some state programs, such as a popular state college tuition scholarship called TOPS.
When Jindal took office, it was relatively easy for him to avoid raising taxes because the state was seeing a spike in revenues. Federal aid after hurricanes Katrina and Rita, private-sector growth related to the rebuilding effort, and a boom in gas and oil prices resulted in a “massive false economy,” says state Rep. Julie Stokes, a Republican who sits on the state House Ways and Means Committee.
In his first year, Jindal signed into law a partial repeal of the so-called Stelly plan, a tax reform package authored in 2002 by a Republican state lawmaker. In general, the plan lowered sales taxes and increased income tax collections. In 2002, a slight majority of voters approved the plan as a state constitutional amendment, but six years later, the income tax provision had become unpopular among middle-class residents unhappy with the change on their annual tax returns. The repeal kept the lower sales taxes, but also cut the personal income tax.
Because the state was experiencing a temporary boom in its economy, the ramifications of those 2008 tax cuts weren’t evident immediately. But from fiscal year 2010 through 2016, Louisiana averaged $1.2 billion in annual shortfalls. Stokes has studied the state’s balance sheets as a legislator and a certified public accountant. She argues that both liberal and conservative politicians are distorting the issues for political gain. The debate between the left and right in Louisiana is “no longer about how we structure adequate funding for the government,” she says. “It’s the right saying, ‘We’re flush with cash and wasting your money,’ and the left saying, ‘We’ve cut and cut and cut to the point where it’s dangerous for our future.’” As she suggests, the gulf between those two stories leaves the public feeling frustrated and confused.
I'm trying to leave maximum maneuver space and flexibility to negotiate [a budget] with the legislative leadership," Edwards says. (AP)
The Edwards administration is largely correct that the state government collects less revenue today than it did in the 2000s, but Stokes challenges its point of comparison. By 2007, the year that the governor uses, the state was already enjoying the benefits of the “false economy,” so it’s no surprise that state collections were higher then. Still, she says, looking at the 2005 fiscal year, the last budget before the hurricanes, the state had lost about $100 million in inflation-adjusted general fund revenue. If the temporary sales tax goes away, that number will grow to more than $1 billion.
Conservative critics who say state government spending is out of control have a point, Stokes believes, but they often leave out important context. It’s true that state spending is about $1 billion higher today than in 2005, but the main drivers for that increase have nothing to do with annual appropriations or recent budget practices. One contributor is old debt payments for employee pensions, which are mandated under the state constitution and were scheduled to start small in 1989, peak around now and then taper off at the end of the 40-year pay period. The annual cost of pension debt in the 2016 fiscal year was nearly $1 billion more than it was in 2005. After taking into account those debt payments and a few other mandatory items, Louisiana actually spends $300 million less today. Its spending cuts, though, haven’t been enough to cover the budget shortfall. What the state needs is an influx of stable income. “To say that there’s no problem on the revenue side is pretty disingenuous,” Stokes says. “It’s definitely not my preferred message because I’m a conservative in a conservative district, but we have to embrace the facts, and the honest problems, and get that communicated to the electorate so that we can fix this and move on.”
As of last month, it remained unclear whether Edwards and legislative leaders would find enough common ground to replace the expiring one-cent sales tax. Last year, Edwards proposed a commercial activity tax on businesses after it became clear that the budget task force recommendations had failed to gain traction in the House Ways and Means Committee. Now, Edwards wants House Republicans to put forward a plan of their own. “Saying no to everything cannot fix the problem,” he says.
At the roundtable meetings with local elected and business leaders, the governor’s team outlined some ideas they support, such as eliminating some exemptions in the sales tax. Edwards says he would back legislation based on any of the budget task force recommendations from 2016. “I’m trying to leave maximum maneuver space and flexibility to negotiate with the legislative leadership,” he says.
One of the governor’s talking points is that Republican House leaders are refusing to own unpopular cuts. At the roundtable meetings, Robinson, the revenue secretary, invited proposals that would close the budget gap through reduced spending. “If you’re of the mind to go ahead and cut, I can respect that, even though I disagree with it,” she says. “But if so, help us out with what to cut.” In other words, be specific.
Under Jindal, Louisiana saw the steepest college tuition increases of any state, which was a direct response to the most drastic reductions in state higher education funding anywhere in the country. With so much of the remaining budget tied up in dedicated funds protected by state law or the constitution, state money that flows to universities may be one of the only discretionary items where significant cuts are possible. That’s why Edwards believes conservative lawmakers will have to come around on taxes. “There is no comfort about raising revenue,” he says, “but there’s a lot of discomfort around continuing to cut, especially as it relates to education.”
What Edwards portrays as flexibility, Rep. Cameron Henry, Republican chairman of the House Appropriations Committee, describes as an attempt to avoid responsibility for potential tax increases. “He’s trying to almost circumvent his leadership role by getting everyone else to tell him what to do,” Henry says. “Well, that’s not how governors work. It’s his job to at least let the legislature know, ‘Hey if I was king,’ which as governor of Louisiana you pretty much are, ‘these are the five taxes I would want to raise. These are the five exemptions I would want to get rid of.’ It’s got to be driven by the governor.”
State Senate President John Alario, who is a Republican but also an Edwards ally, suspects the solution will have to involve raising taxes or fees to replace the expiring sales tax. “Nobody wants to have additional revenues put on them, but they also want the services that government provides,” he says. “I’m hoping that somewhere down the line we can find a compromise to make it work.”
Democratic House Rep. Leger, who is now speaker pro tempore, says lawmakers have made enough bipartisan deals in the past two years to give him hope that they’ll avoid the fiscal cliff. The temporary one-cent sales tax and other short-term measures are an example of the legislature compromising to address a deficit. Last year, Edwards and the Republican legislative leadership managed to fully fund the TOPS college scholarship program while avoiding higher education cuts for the first time in almost a decade. Lawmakers also left gas tax revenue available to use on the state’s backlog of transportation infrastructure projects, a shift from prior years when they used that money to plug holes in the general fund.
Louisiana has been able to enact budgets in the past because majorities of both Democrats and Republicans came together on an option. The consensus is that this will ultimately happen again. But it may not be a long-term solution. “It’s not that nothing has been accomplished,” Leger says. “The largest pieces of the puzzle, however, are left undone.”
*CORRECTION: A previous version of this story misused the word 'then.'