The Louisiana Senate on Saturday set the stage for the frenzied homestretch of the 2015 legislative session when it passed measures that would raise some $325 million in new money next year.
The bills, passed in a rare Saturday session, would roll back business tax exemptions by up to 28 percent, although whose taxes would go up and to what extent were not immediately clear because of complicated amendments approved with little discussion by senators.
Following Saturday’s moves, both the House and Senate have approved all but two of the major pieces of legislation that would raise or cut taxes. That sets the stage for lawmakers to try to negotiate a final budget that prevents deep cuts for Louisiana’s public health care system and public colleges and universities — while not prompting a veto from Gov. Bobby Jindal over the tax measures.
“We now know where everybody stands,” Rep. Joel Robideaux, R-Lafayette and the chairman of the tax-writing Ways and Means Committee, said in an interview. “The negotiations start in earnest. We have a lot of work ahead of us.”
Expect those negotiations to take place behind closed doors, in the offices of the Senate president and the House speaker and in the basement rooms of the Capitol that are off limits to the public and reporters.
Legislators and Jindal have considerable reason to reach a budget deal, for both public policy and political reasons, before the Legislature adjourns by 6 p.m. on Thursday.
A Jindal veto threatens to shut down state government when the new fiscal year begins on July 1, meaning LSU and all other colleges and universities, Louisiana State Penitentiary at Angola and all other state prisons, and all the other government services that the state provides could be without funding until the Legislature passes another budget acceptable to the governor.
A session to override the governor cannot begin until July 21, and to carry out the override would require a two-thirds vote in each chamber. Governors have been overridden only twice since the state constitution went into effect in 1974. Lawmakers also could call themselves into a special session, but approving the budget there would take an even higher bar, a three-fourths vote.
Legislators running for re-election or another office would have to explain the budget mess to voters over and over again. Jindal would have to explain it to the national press as soon as June 24 when, if as expected, he announces his campaign for president in New Orleans.
If lawmakers can’t pass a budget acceptable to Jindal, House members are collecting signatures to pledge to override the governor. That effort has signatures from more than 85 of the 105 House members, said Rep. Cameron Henry, R-Metairie, the prime mover.
“The purpose is to let the governor understand the position of a significant number of House members,” Henry said in an interview Saturday. “We’ve worked very hard this session and taken a lot of votes we’re not comfortable with to fund higher education and health care. It’s important that the effort to get that legislation passed is not derailed because the governor disapproves of fixing a fiscal problem he’s created.”
To be fair to Jindal, all but one senator approved last year’s budget, as did 76 House members, although not Henry.
The House signature effort reflects the governor’s weakened political standing — he had a 32 percent approval rating in the latest independent poll, 10 points behind President Barack Obama in Louisiana — lawmakers’ frustration with his frequent campaign appearances out of state and his adherence to the anti-tax guidelines of Grover Norquist’s Americans for Tax Reform, which require that tax increases be offset by equivalent tax decreases.
The House sent 11 tax measures to the Senate, which approved all but one of them on Friday and Saturday. House Bill 779 by Rep. Erich Ponti, R-Baton Rouge, would scale back the state’s solar energy program. It is before the Senate.
In all, the Senate approved an estimated $650 million in higher taxes, which, if correct, would be short of the $750 million in new revenue included in the budget up for Senate approval on Monday. (The Senate won’t meet Sunday; the House will meet to receive the Senate tax bills but is not expected to stay in session long.)
Legislators are proposing to close the projected $1.6 billion budget deficit through a series of spending cuts and higher tax burdens on businesses and smokers.
On Saturday, the Senate passed four major tax measures. Each one would have to return to the House for final passage after being amended by the Senate.
Three of the measures were House Bills 624, 629 and 635, all sponsored by Rep. Katrina Jackson, D-Monroe.
The other measure was House Bill 805 by Rep. Bryan Adams, R-Terrytown.
Sen. Robert Adley, R-Benton, handled all four bills in the Senate.
The measures passed with little substantive debate other than questions raised by Sen. Karen Peterson, D-New Orleans, who asked Adley to clarify amendments to the bills.
House Bill 629, approved on a 27-12 vote, would reduce corporate income and franchise tax credits for different business tax breaks by 28 percent. It would raise $125 million to $150 million next year, Adley said.
Companies could apply those lost tax refunds to offset tax payments during the following five years. This would reduce the tax gain to the treasury over those five years.
“We’ve worked with lawmakers to lessen the impact as much as possible,” said Chris John, a former congressman who is the president of the Louisiana Mid-Continent Oil and Gas Association, which represents the major oil companies. He said the so-called five-year carry-forward provision “was very important.”
The Senate approved an amendment to HB805 by Sen. Brett Allain, R-Franklin, that would allow most small businesses paying the inventory tax to continue to receive the full refund.
One major piece of tax legislation not yet passed by the Senate is House Bill 828 by Henry, which would phase out the corporate franchise tax over five years.
“That’s part of the negotiations,” Senate President John Alario, R-Westwego, said following Saturday’s session.
Overall, he said he was feeling good that lawmakers will be able to emerge Thursday with a budget that Jindal will sign.
One big remaining question is whether the House will accept the SAVE fund, which would impose a fee on students that they wouldn’t actually have to pay through the creation of tax credits for an equivalent amount.
Sen. Jack Donahue, R-Mandeville, has responded to critics repeatedly in recent days by saying the measure creates the tax offsets Jindal needs so he won’t veto the budget.
“That’s the biggest challenge: working within the governor’s guidelines,” Alario said Saturday.
Peterson chastised senators Saturday as she tried to get them to strip the SAVE fund from a measure revamping the state’s film tax credit.
“Why do you pledge yourself and your soul to Grover Norquist?” Peterson asked her colleagues. “It belittles the office that we hold.”
Her effort failed, 9-28.
Alario said he still doesn’t know how he will get the House to approve the SAVE fund.
“I’ll sleep on it or not sleep on it,” said Alario, who in previous days had said the budget conundrum was keeping him up at night.
For his part, House Speaker Chuck Kleckley said on Saturday that he was asking the House staff to determine exactly what the Senate did when it passed the amendments to the tax measures.
Kleckley, R-Lake Charles, reiterated what he told The Advocate Friday: that he views the Senate’s 72-cent tax increase on cigarettes as unacceptable and believes a cigarette tax of any amount should be removed from consideration. The House approved a 32-cent increase.
Kleckley said he didn’t think the House would approve the higher rate, noting that the 32 cents passed with 78 votes, only eight more than the two-thirds necessary.
He also said he’s hearing complaints from customers at his Lake Charles convenience stores.
“Those people who come through my convenience stores are my constituents; they live in my district,” Kleckley said. “They have been very loud and clear to me about even a 32-cent tax.”
Alario said he hoped Kleckley would put the cigarette tax back on the table.
Follow Tyler Bridges on Twitter, @TegBridges. For more coverage of the State Capitol, follow Louisiana Politics at http://blogs.theadvocate.com/politicsblog/.