In advance of the third special session, State Representative and Speaker Pro Tempore Walt Leger (D-New Orleans) delivered the following remarks to the New Orleans Chamber of Commerce on June 13, 2018.
As prepared for delivery:
The people in this room represent hope, prosperity and opportunity for this City, our region and our State. The fact that you are here speaks to our collective hopes and dreams. I know that your dreams, like mine, go beyond the operation of successful business enterprises, though that is important, I know that you seek a more deeply connected community rooted in a system of values that works for a common good. Incidentally, a functioning Legislature should join you in that dream and serve as a representative body that pursues policy initiatives through vigorous debate to promote peace in our communities and opportunity for our people.
My job today is to provide you with an overview of the recently completed legislative session…unfortunately, we have recently completed so many legislative sessions, I’m not sure where to start. We have in fact, completed 9 sessions since this term started in 2016, with a tenth beginning next Monday.
So I figured that I would start by sharing a quote…
“The instability, injustice, and confusion introduced into the public councils, have in truth, been the mortal diseases under which popular governments have everywhere perished;…Complaints are everywhere heard from our most considerate and virtuous citizens, equally the friends of public and private faith, and of public and personal liberty, that our governments are too unstable, that the public good is disregarded in the conflicts of rival parties, and that measures are too often decided, not according to the rules of justice and the rights of the minor party, but by the superior force of an interested and overbearing majority.”
Well, does that remind you of anything? Sound familiar…the Advocate, the Times Picayune/Nola.com, Stephanie Grace, Jarvis Debarry, last week?… Instability. Injustice. Confusion. Our most considerate and virtuous citizens complain everywhere… many of you in this very room. The public good is disregarded in the conflicts of rival parties.
That quote is from November 23, 1787. The Federalist Papers No. 10 and James Madison’s thoughts on the dangers of factions.
I share this with you not to focus on the negative, but to bring you comfort.
In today’s fast paced and ever changing world, it is tempting to seek stability and to harken back to a QUOTE “simpler time.” If you leave here with nothing else today, I want you to hear this: “We have been here before, we will be here again…. this too shall pass.”
Now why should we have hope? Well, over the course of the last year, unemployment is down a full point from a year ago and more people are working in the State of Louisiana than ever before, 2.04M, breaking the previous record in 2014.
DXC Technology has been heralded as one of the biggest economic development wins in the nation, and will bring 3000 jobs to New Orleans over the next five years, claiming stability in higher education as a motivating factor.
Just this week, it was announced that Accruent, an Austin-based technology firm will be adding 350 jobs over the next two years to a New Orleans office. Their CEO, John Borgerding, is quoting as saying:
“Since 2012, New Orleans has led the nation in technology job growth, and we are pleased to continue this trend with the talent we need to support our strong acceleration in new technologies … Given the vibrant corporate community and tremendous growth opportunities, New Orleans became the clear choice for our next wave of expansion.”
This from a CEO. Not a New Orleans or Louisiana Economic Developer.
Also, just this past week, it has been reported that Oklahoma, not Louisiana, is the incarceration capitol of the World. As a former prosecutor and the author of the Criminal Justice Reinvestment Taskforce, I know that this is another signal that Louisiana is moving in the right direction.
Spending taxpayer dollars on job training, re-entry, and educational opportunity rather than simply locking people up is a more efficient expenditure of tax payer dollars, while promoting better public safety and crime reduction and reducing the incarceration rate all at the same time. But we have a lot more work to do.
Though many lament the legislature’s failure to accomplish anything meaningful this year, I am proud to have co-sponsored a bill that will allocate $10M additional dollars to early childhood education next year. Rep. Steve Carter and I led a bipartisan effort, with collaboration and support from the business community, to invest meaningfully in our future. Early childhood education may be the single best investment of taxpayer dollars and the best way for us to change the trajectory of the state of Louisiana. This investment can set the table for a lifetime of learning, set our children up to compete in the global knowledge-based economy AND support our current workforce by ensuring that parents can fully participate, seek promotions, excel in their careers and know that their children are in a safe, high quality educational setting at the same time.
I also worked with my colleagues and the Governor to make Louisiana a better place to do business.
My bill creating the Louisiana Small Business and Entrepreneurship Council will provide an avenue for the legislature, the department of economic development and the Governor’s office to work in concert with small businesses and entrepreneurs across the state to remove barriers and unnecessary regulations in order to identify and enact policies that promote job creation and job growth, making Louisiana an even better place to do business.
I also worked with the Department of Health to create the Expedited Licensing Process, which is a first of its kind program to get much needed healthcare facilities through the licensing process as quickly and efficiently as possible, because while access to affordable and high-quality health care is essential to a healthy workforce, the healthcare industry is also big business. It employs tens of thousands of people in Louisiana and provides some of the highest paying jobs in our state. Neither patients nor our economy can afford to wait on a slow bureaucracy to be certified.
However, despite the major economic development wins, our failure to fund state priorities by the end of the second special session puts at risk our credit rating, our ability to upgrade our infrastructure and the stability of higher education and therefore our workforce. Instead, we are now facing a third special session, the seventh since 2016, to fix the very same structural budget issues that plagued us during the first special session two years ago.
I’m sure most of you have read various accounts about the breakdown in the House of Representatives that led to this unfortunate, unnecessary and costly third special session. And while reading, I’m sure that most of you were struck by the theatrics of it all. I know I was. The question I’ve been asked most over the last few weeks and months is “what’s wrong with you people.” You think it doesn’t make sense, and you’re right. You think you are fed up with politics, ask my wife what she thinks, she’s right here in front and she’s not shy.
But let’s not gloss over this, let’s talk a little about politics and political strategy and how we got here, and how we can move forward together.
Let’s agree at the outset that politics is something that exists, it is part of human nature.
It has to do with the way that we all interact, that we all engage as citizens, as a part of a community.
Political strategy, on the other hand, is a choice. We may disagree on the strategy, but we should at least be willing to accept that each legislator or group of legislators will utilize a strategy to accomplish their mission. Sometimes that strategy is well thought out and articulated, sometimes it is fly by the seat of their pants, but it is ultimately how one gets from here to there. Strategy is an essential part of politics. And politics is an essential element of our form of Government.
I will get back to this…but for a minute, let me walk you through the process the way I see it.
We all recognize that there are legitimate philosophical differences among legislators and parties as to what our government should do and how much it should cost taxpayers. In order to work through these differences, members advocate for their priorities-healthcare, higher education, early childhood education, the TOPS program, the department of children and family services…in order to fund priorities.
A combination of politics and compromise are generally necessary in order to reach an agreement-that is, if your goal is to actually reach an agreement.
But let’s say, hypothetically, that your goal was to discredit the other side, and ultimately get their leader – let’s say the governor – defeated in the next election. A strategy to achieve that goal might be to see the state government under his watch crash and burn. Let’s call this Operation Scorched Earth. An effective way to crash state government is to not fund it sufficiently to pay for the basic services some citizens need and others expect. A full-on government shutdown might be plausible in such a strategy of obstruction.
Now, in the best of times, forging compromise can be a challenge, Madison and dozens of others over time have discussed, at length, how challenging it can be. When times are good, it is important to have strong, effective leadership. But when times are tough-when oil prices are down, when the world and national economy are changing rapidly, when tariffs and trade wars dominate the news- good leadership is critical, especially in a state like Louisiana where international trade and commerce are essential to the health of our powerful and productive Port system. When times are tough, it is even more important that we execute the little things with precision. There is less room for error.
So, it is especially frustrating when our budget, a moral document that speaks to our priorities, is failed by our leadership and held hostage by an extreme political strategy. Instead of being used as a tool to build compromise, to build roads, to build ports, to build our future, politics is being used as a tool to obstruct, forcing us to limp from one special session to the next, each time avoiding true structural reform.
Compromise has been the greatest casualty of this strategy of politics.
Due to inaction, lack of compromise and ignored opportunities for real reform, the Legislature was forced to fashion a budget in the 2018 Regular Session encompassing $648 million in cuts and no replacement revenue for the $1.4 billion in taxes that will expire on June 30, 2018. That’s on top of hundreds of millions in reductions already made. These cuts threatened to shutter the state’s public-private partnership hospitals and put in jeopardy healthcare services for 46,000 people, while only funding TOPS at 70%, making $96 million in cuts to higher education, and placing public safety at risk through reduction to the Department of Corrections.
When this budget landed on the Governor’s desk, he vetoed it because it was irresponsible and it would have caused great harm to our State.
This failure to pass a responsible budget in the regular session coupled with the failure to replace temporary revenue in the 1st Special Session brought us to the 2nd Special Session with the immediate need to pass a budget and figure out how to fund it. However, for the first eight days of the second special session Session-a Session with the main purpose of passing a budget and funding it- I was the only member of the Legislature who filed a budget bill (HB 26). It sat for days without a hearing in the Appropriations Committee, but instead of moving the process forward, the Chairman of Appropriations refused to have a hearing and refrained from filing his own budget bill, despite the fact that the Chairman is traditionally the author of the budget. Instead, he blamed the Governor for vetoing the budget passed during the Regular Session and threw up his hands. He wasted even more time by trying, and failing, to override the Governor’s veto-a vote that came up nearly 20 bipartisan votes short of passing. It wasn’t until I tried to force a hearing on the House Floor and discharge the committee on Appropriations that the Chairman of Appropriations finally relented, filed his own budget bill and scheduled a hearing…this after wasting 8 days.
In the last thirty minutes of the second special session, on the 97th day of Session just this year, we found ourselves in a dire situation. We finally passed a budget at 11:42pm, but we didn’t have the revenue to fund it. Though the main instrument during the session was HB 27, by Rep. Lance Harris, the Chairman of the Republican Delegation, it was insufficient to fund the budget that had been passed and received only 38 votes in the House and had little to no support in the Senate because it failed to adequately fund the budget by only renewing 1/3 of a penny of sales tax. So, the Senate amended my HB 12 on the Senate floor to meet the need. It passed 32-6 and was returned to the House of Representatives after 11pm on the final night of Session.
The first time the House voted on this compromise bill, that renewed ½ a penny of sales tax, it fell six votes shy of the 70 needed to pass. When a last-ditch, bipartisan effort to reconsider the vote came up, a small group of Republican Legislators blocked the vote and ran out the clock, intentionally sending us to a third special session and claiming that the Senate and the Governor didn’t offer them a compromise.
Republican House members said they wanted a tax cut
Democrats agreed and HB 12 offered over $400 Million less revenue than last year
Republicans said they wanted to reduce the State General Fund
Democrats agreed and HB 12 reduced it by $200 million from what would have been a standstill budget as defined by legislation Sen. Jack Donahue passed in 2017
The Governor, the Senate and the House Democrats wanted the ½ a cent of sale tax to be permanent
HB 12 offered to make it temporary through 2025
The Governor wanted the budget shortfall funded at $650 Million, but Republicans wanted it funded at $400 million
HB 12 offered to fund it at $507 million-right in the middle
It’s not that there wasn’t a compromise. The compromise was on the table-they just rejected it repeatedly and irresponsibly. They say what they want is smaller government. They say what they’re fighting for is a smaller standstill budget. They say what they’re holding out for is less generated revenue. But if this were true, they could have, at the very least, allowed a second vote on the compromise bill that passed the Senate 32-6 with the support of legislators of both parties from every part of the State. They could have chosen the strategy of compromise over the strategy of obstruction.
I don’t have to tell you that failing to pay your bills and keep your commitments is no way to do business. It sends the wrong message to the bond markets and to business people around the nation and the world. You know what sells…let’s ask GE, DXC Technology, Accruent…stable funding for higher education and a commitment from our Community and Technical Colleges and Universities to work with business to ensure a high quality workforce. That’s how Louisiana wins.
Now, because just a few people refused to participate in the process and compromise,
TOPS is short over $88 million of being fully funded.
Higher Education is short over $101 Million
Children and Family Services is short over $35 million of being fully funded, putting at risk over a BILLION dollars in federal funds
Corrections is cut by $43M and the Juvenile Justice system is short over $45M dollars;
We will now enter into the third special session of 2018 in order to avoid a government shutdown on July 1, 2018, and it seems our hypothetical scorched earth scenario from earlier is looking more and more realistic.
We face the same fiscal challenges placed before us months ago, but make no mistake, damage has already been done. Higher education leaders came to my office months ago begging us to settle this matter sooner rather than later. Later was two months ago, when most students had already made their college decisions based on the award letters they were sent. Our award letters had asterisks by the scholarship amounts. The CEOs and other business leaders in our healthcare industry are already drafting documents revising contracts and services. People are angry, confused and scared. And it all could have been avoided, but here we are. We know what the options are.
Now it’s just a matter of values. What do we value? As a community, as a business community, what do you see value in?
Do you see value in state universities, community and technical colleges operating at a level where they can provide opportunities to our students, your children?
Do you see value in a tax code that is simplified and uniform so that our credit rating increases and we can make capital investments in our infrastructure?
Do you see value in a healthcare system that can offer access to care for all Louisianans, can provide graduate medical education for future physicians, and maintain our academic medical centers?
I ask you, what political strategy has value if it fails to deliver results that can propel us forward?
And maybe more importantly is it worth putting the people of the state through this in order to execute any political strategy?
Now is the time for YOU to decide. The third special session begins on Monday. In five days. In five days, we will once again convene with a budget that does not fund our priorities. The same people will come together with the same information that they’ve had for the last three sessions. Should we expect the cycle to continue?
In Federalist Paper No. 10, Madison warned that while it may be our wish for Enlightened Statesmen and women to adjust clashing interests and render them subservient to the public good, that “Enlightened Leaders will not always be at the helm.”
We know this to be true: we don’t always have the best boss, or the best coach, or the best teammates, or the best managers. We all know that this is part of the roller coaster, the ups and downs. But when it comes to enlightened leaders in our government…well I have some homework for you. “ENLIGHTEN THEM.”
You, in this room, have the power to demand more and demand better.
You have the ability to tell your legislators not to crash the budget over 17 cents on every $100 dollars spent, the difference between .33 cents and .5 cents.
You can enlighten them on the necessity of investment in higher education, in graduate medical education, in funding TOPS to keep our promise to families and children, in funding the Department of Children and Family services, which conducts 20,000 child abuse investigations and helps to care for almost 8,000 foster children every year.
Now is not the time to allow frustration and inaction to set in…that would be the easy way out…now is the time to Press On.
So REMEMBER, We have been here before, we will be here again…and this too will pass!
Let’s agree that we here in this room—you, the business community of this Great City and Region—don’t have to be stuck with unenlightened leaders—you have the capacity and the responsibility to ENLIGHTEN THEM.
I believe in you—and I’m honored to work for you.