The four major candidates for Louisiana governor agree that the state’s in desperate need of tax incentive reform to shore up the budget — and soon.
Republicans U.S. Sen. David Vitter, Lt. Gov. Jay Dardenne and Public Service Commissioner Scott Angelle and Democratic state Rep. John Bel Edwards all touched on the state’s growing budget crisis during a forum in Baton Rouge on Tuesday.
“You will see whoever is governor early next year calling a special session,” predicted Dardenne, who previously served in the state Legislature.
Louisiana’s facing a $1.6 billion revenue shortfall in the coming year. That has left Gov. Bobby Jindal, a Republican who cannot seek re-election because of term limits, and state legislators scrambling to prevent deep cuts to funding for higher education and other areas of the state budget.
“There are no more Band-Aids in the first aid kit,” Edwards said. “It demands a structural fix. That’s what we have to do.”
All of the candidates say they back a review of the way most areas of the state budget have been protected from cuts, leaving higher education particularly vulnerable, as well as a review of the tax incentives the state provides for business and industry. In an eight-part series in the fall, The Advocate examined the millions of dollars in tax credits the state doles out each year in an attempt to boost its economy — but often to questionable returns. The looming budget crisis has sparked louder calls for a review of those incentives.
“We need to do that in a meaningful way and not kick the can down the road,” Vitter said of plans to immediately call a special session, if elected, to address taxes and the budget.
Angelle, a former Jindal appointee, said the budget is fundamentally out of whack. “Things are wrong. Things are broken,” he said.
But while all agreed that a review is needed, few specific ideas were offered up. Instead, the candidates said reform would require stakeholders to come together to address the issues and weigh the benefits of all incentive programs.
“Everybody’s got to be part of the solution,” Dardenne said.
Tuesday’s event, the latest in a series of gubernatorial forums hosted by interest groups, was sponsored by the National Federation of Independent Businesses’ Louisiana chapter, Louisiana Restaurant Association and Louisiana Retailers Association.
Several of the talking points directly hit on small-business issues and attempts to relate to the luncheon’s nearly 200 attendees.
None of the candidates are backing a proposal in Jindal’s executive budget recommendation to roll back the state’s inventory tax credit program, saving the state millions that could be put toward higher education.
Jindal’s plan would allow businesses to claim what they owe in state taxes, but anything above that amount would be kept in the treasury rather than refunded to the taxpayer. The idea has been unpopular in the business community. Currently, all the inventory taxes paid to local governments by businesses are refunded by the state.
Removing the inventory tax altogether, as some want, would deprive many local and parish governments of a large portion of the money they use to pay for services.
All the candidates took swipes at the governor and his plans for the inventory tax. But one of Jindal’s staffers, Shannon Dirmann, who is in the governor’s press office, zeroed in on Vitter, castigating the U.S. Senator in a statement emailed to reporters. Vitter wants to consider the idea of changing the inventory tax refunds as part of an overall analysis of exemptions and credits. Dirmann wrote: “After eight years of tax cuts, maybe the voters will want to pay more in taxes. Usually that is the Democrat platform, the Obama approach.”
Vitter called the governor’s approach to the inventory tax “absolutely crazy,” then made what has become a familiar jab at Jindal’s presidential ambitions.
“This will be my last political job, elected or appointed. Period,” Vitter said, adding that means he wouldn’t care about appeasing national interest groups “or voters in Iowa.”
Dardenne, talking budget priorities, also appeared to take aim at the Jindal administration, which has repeatedly cut funding for colleges and universities: “We will not put higher education on a back burner under my administration,” he said.
Touting leadership skills he said he learned attending West Point, Edwards said Louisiana “will do better as soon as we make better decisions about who we elect.”
Angelle didn’t come out directly swinging against Jindal, but he didn’t shy away from criticizing the situation the state faces.
“How can we have the highest (gross domestic product) we’ve ever had in this state, the highest nongovernmental employment we have ever had, and yet we have a $1.6 billion deficit?” he said. “Something is wrong. Something needs to be fixed.”