Acadiana legislators tackle the elephant in the room: the state’s $1.6 billion budget hole _lowres

Advocate staff photo by BRYAN TUCK -- Louisiana legislators, from left, Sen. Page Cortez, R-Lafayette, Rep. Stephen Ortego, D-Carencro, Rep. Stuart Bishop, R-Lafayette, and Rep. Terry Landry, D-New Iberia, speak at a forum Friday at the Picard Center in Lafayette.

Acadiana legislators who gathered at a Friday forum agreed on the obvious issue they will face when the Legislature convenes Monday: the unpleasant and difficult task of trying to plug a $1.6 billion budget hole.

The specifics on how to do it — and whether the end product will look anything like the budget proposed by Gov. Bobby Jindal — are still being worked out.

“Bottom line is we have to make changes. It’s going to affect everybody,” state Rep. Stuart Bishop, R-Lafayette, said.

He was joined Friday by state Sen. Page Cortez, R-Lafayette, and state Reps. Stephen Ortego, D-Carencro, Vincent Pierre, D-Lafayette, and Terry Landry, D-New Iberia.

A key part of the Jindal administration’s budget proposal is curtailing refundable tax credits, checks paid by the state to individuals and businesses when a tax credit is more than what’s owed in taxes.

The administration estimates that limiting the tax credit payouts would save about $526 million a year, still not enough to prevent cuts in health care, education and other areas of the budget.

Cortez said he expects the Legislature to dig deep into the details of that proposal, reviewing each credit to determine if the money given up by the state is benefiting the economy by nurturing new industries and creating jobs.

“If you’re not, then we need to reduce them or repeal them,” he said.

Bishop said the Legislature has approved a string of tax credits for various industries over the years and rarely revisits them once the credits are in place.

“At some point, it has to be capped,” he said. “A lot of these credits, we are not seeing that return on investment.”

But the tax credit issue could be tricky.

Much of the $526 million in savings would come from ending refundable state tax credits for inventory taxes that companies pay to local governments for inventory, office equipment and other business-related property.

It’s a credit businesses will fight to keep.

Ortego lamented that much of the recent debate over tax credits has focused on the film industry.

“It’s not even in the top 15 on our exemption budget,” he said.

Landry said he believes all tax credits should be reviewed and that the Legislature should be especially wary of tax credits and other relief given to long-established industries that might not need them.

“Why would we give Exxon, one of the most profitable companies in the world, a tax break?” he asked.

Ortego was alone among the panel of five in offering the optimistic view that Louisiana could make it through the budget crisis without scaling back government services.

“I think we can solve the problem without cutting state government and without raising taxes,” he said.

He said a key part of the fix would be accepting federal health care money under the Affordable Care Act, or “Obamacare,” for the expansion of Medicaid.

Jindal is opposed to Medicaid expansion, and several expansion efforts died last year in the Legislature.

“It’s partisan nonsense, and the people are suffering because of it,” Landry said.

Bishop offered the opposing view, arguing the state could be required to keep up higher levels of health care spending to sustain the expansion even if the federal money goes away.

“What does it cost the state five years from now?” he asked.

Ortego also took aim at suggestions in the proposed budget document that legislators consider increasing college fees to help shore up higher education.

“To me, it is a tax increase on young people’s dreams,” he said.

Even if the Legislature manages to fill the budget hole, it would be tough to claw back from years of cuts to health care and education, Landry said.

“Are we better off now than we were eight years ago?” he asked, taking a jab at Jindal’s tenure as governor.

Landry said even if new revenues were found and funding for education and health care stabilized, the state has few prospects for addressing what he sees as another priority: the $12 billion backlog in road and bridge needs.

“That’s not a can we can kick down the road. It’s a 55-gallon drum full of nitroglycerin, and it’s going to blow up in our face,” Landry said.

Friday’s forum was sponsored by the University of Louisiana at Lafayette and the regional economic development group One Acadiana, formerly the Greater Lafayette Chamber of Commerce.

Follow Richard Burgess on Twitter, @rbb100.