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Wednesday, March 8, 2023

Making $1.5 Billion Count

Waguespack puts insurance and school choice as top issues

Stephen Waguespack, president and CEO of the Louisiana Association of Business and Industry, posed a simple question to communities leaders gathered for a preview of this year’s legislative session at a breakfast at the Petroleum Club.

“Are you riding or driving?” he asked the crowd.

Waguespack said the answer will help determine the state’s potential for future growth.

“If you look at some of the other states and where their growth comes from, it doesn’t come from who’s elected or occupies any seat in the capital at any given time,” he said. “It comes from communities filled with local business leaders who demand and drive change. And they are intolerant when it doesn’t happen.”

Historically, municipalities and local leaders have been inclined to ride along while legislators in Baton Rouge drive, Waguespack explained.

“In Louisiana, we’re more go along to get along,” he said. “We sit shotgun. We play on our phone a little bit. It’s time to ask ourselves, is this the year to get behind the wheel, or is this the year to ride along?”

He said three general areas would define this year’s legislative session: the insurance crisis, tax and budget reform, and educational choice.

During a special session earlier this year, the Legislature passed bills to approve $45 million in incentives for private insurance companies to return to the state.

Waguespack said that was a positive first step, but more must be done in the regular session, including tort reform.

“We’ve got to make this a more exciting market for insurers to come in and invest,” he said. “That’s the name of the game. They have a choice. There’s no federal law that requires insurance companies to cover in certain areas. They can choose.”

Waguespack said Louisianans should keep news about the state budget in perspective.

“The good news … they have about $1.5 billion to spend,” he said. “That’s good news, right? The challenge is that it is based on a mirage. You shouldn’t assume that is a product of a blowing and going economy. What that is, is COVID came in, turned everyone’s world upside-down, a lot of programs were put in place. Federal cash was carpet-bombed on the state to kind of make everything go OK. Well, now, you have surpluses everywhere.

“Don’t be fooled by it. A couple of years from now, that surplus will not be there. If it is, it will because of economic growth. It won’t be because the federal cash machine is still there.”

He offered his thoughts on how lawmakers should use that money.

“Spend that surplus wisely,” he said. “One-time infrastructure, fortification of communities, other one-time needs. Don’t create recurring losses that we will be challenging in years to come.”

Waguespack said that a temporary sales tax will come up for renewal, extinction or change in 2025. That is affecting how legislators look at tax reform.

“My gut tells me you’re not going to see the major change this year, but you’ll see a lot of discussion about major change this year,” he said. “The reason why is in 2025, that is a year everyone in the Legislature has circled as a date that we have to figure out a strategy.”

The last major area of concern Waguespack said needs attention is educational choice. “It’s about empowering parents and families and communities to take control of their educational future,” he said.

He said the issue revolved around private schools versus public schools. But the problems are different now and need more customizable solutions. He used the example of his own family. He has three sons with very specific and individual educational needs.

“Why shouldn’t every family be able to make a decision on what is best for each seat at that kitchen table?” he asked.

He said it’s an issue that might not be resolved this year but will not go away.

“I hope it catches fire this year,” Waguespack said. “I am skeptical it will. But I think there will be a growing hunger and thunder you will hear next year, and education choice will come to Louisiana.”

He said the state needs to focus on these issues and not be distracted by what he calls “bumper-sticker bills.”

“I’m not sure what else you should call it,” Waguespack said. “Truth is, it is an election year. You’re going to see a lot of bills introduced to create fireworks here, an explosion there, a headline there. It’ll be fun. It’ll be theatric. You’ll see it on Facebook. The newspapers will love stuff like this. But at the end of the day, it’s bumper-sticker bills.

“Don’t go chasing the flares and the tennis balls around the yard. Stay focused on what the mission is. We think the mission insurance, what to do with that tax and budget, and prepare for an educational choice moment that’s coming.”

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