Update, 1:08 a.m.
Louisiana Gov. John Bel Edwards got less than half the $600 million he sought for schools, hospitals, the TOPS scholarships and other programs during the 18-day special legislative session that ended just before midnight Thursday.
A final effort to raise $88 million more by ending an individual income tax break sank Thursday in the face of opposition by Republicans in the state House.
The Legislature passed the budget authorizing the $263 million approved over the past 18 days when the House approved the budget bill only 45 minutes before the midnight deadline of adjournment.
The vote came 15 minutes after a split-second blackout that left members laughing about possible gremlins in the State Capitol, but also prompted worry whether it might cause a disruption that could keep the House from passing the bill in time.
Because the $263 million was much less than the $600 million, cuts are coming for K-12 schools, LSU’s medical schools in New Orleans and Shreveport, state museums, prisons, the governor’s office, the Legislature, the judiciary, schools for the deaf and visually impaired, the attorney general’s office and dozens of other programs.
The state’s colleges and universities — after suffering repeated budget cuts during Gov. Bobby Jindal’s eight years in office – were getting the full $55 million that Edwards sought for their programs and $4.5 million more for Grambling and Southern universities.
“Under the circumstances, it’s about as good as we could have hoped to get,” LSU President F. King Alexander said Thursday afternoon. “We’ve gone from a proposed 30 percent reduction to less than half a percent.”
But the Legislature raised enough to fund only 70 percent of the popular Taylor Opportunity Program for Students during the coming school year. The 70 percent will force each LSU student to pay about $2,100 in tuition in the coming academic year to make up the difference.
Resolving one key late-night dispute in the State Capitol, the Senate bowed to the House’s demand that TOPS be funded at 100 percent during the fall semester and at about 40 percent during the spring semester, in the hopes that more money would materialize later. Edwards opposes the proposal and indicated that he might veto this instruction.
The budget gives $50 million for the safety-net hospitals that serve the poor, the full amount sought by Edwards but $30 million less than the private hospital providers wanted.
A $44 million shortfall in state aid for public schools was trimmed to $24 million.
The budget did not have the $24 million to open the Acadiana Center for Youth in Bunkie, a state-of-the-art facility that aims to keep youth out of trouble once their imprisonment ends.
State Rep. Sam Jones, D-Franklin, lamented that Edwards will have to mete out budget cuts by July 1 when the new fiscal year begins.
“The cuts could have been avoided,” Jones said in an interview. “They will be hurtful and harmful.”
Most Republicans in the House were unapologetic.
“We really do have sufficient revenue in the state,” said Rep. Mike Johnson, R-Shreveport and a consistent no vote on tax measures. “Our attention needs to focus on our priorities and how we spend those precious taxpayer dollars.”
Edwards has spent the first five months in office trying to clean up a budget mess left by Jindal that caused what Edwards said was a $2 billion shortfall for both the current and upcoming fiscal years.
He called a 25-day special session in February and March that raised $1.3 billion in new revenue, mostly by increasing the state sales tax by 1 cent. Louisiana now has the highest combined sales tax in the country. During that first special session, at Edwards’ behest, the Legislature also raised taxes on beer, alcohol, wine and tobacco and eliminated some exemptions to the state sales tax. He and lawmakers also cut some $300 million in spending.
Edwards called the second special session because he said the Legislature had not raised enough.
The extra $263 million raised during the second special session means that the Legislature has come up with an additional $1.5 billion this year.
“We have to a great degree stabilized our budget and avoided catastrophic cuts,” Edwards told reporters during a press conference just after midnight.
To provide the additional $263 million during the special session, the Legislature raised more money from health maintenance organizations, homeowners with property insurance, large businesses that pay taxes on inventory and companies that overpay their taxes.
On Thursday, Republicans in the House refused to yield to Edwards’ entreaties that they end the deduction that allows taxpayers to deduct their previous year’s state and local tax payments on the current year’s state tax return.
Eliminating that income tax break would have raised the $88 million, with taxpayers who earn at least $100,000 per year paying for 75 percent of the cost.
Trying to pass the bill “would be a futile exercise,” Alario told reporters Thursday morning when he conceded that the governor and his allies could not overcome the Republican opposition in the House.
Once that issue was eliminated, the remaining sticking point Thursday between the House and the Senate over how to spend the extra $262 million. At issue was about $25 million.
Although Republicans hold a majority in both the House and the Senate, the two chambers spent most of the day in recess as negotiators from each chamber haggled over the differences. Much like boys in a schoolyard fracas, neither side wanted to back down to the other. Most senators – Republicans and Democrats alike – lined up with House Democrats against the House Republicans.
In the Senate, Republicans and Democrats met repeatedly in clumps throughout the chamber to bemoan what they saw as the intransigence of the House Republican leadership. In the more partisan House, Republicans and Democrats left the floor to repeatedly hold separate caucuses.
At about 10 p.m., the Senate passed the budget, 38-1, and the House followed suit at 11:18 p.m. on a 56-43 vote.
“Now we have before us an honest, disciplined budget that doesn’t contain tricks and gimmicks,” Edwards said, other than what he called the “contingency funding” of front-loading TOPS.
The Legislature approved several smaller tax bills Thursday.
House Bill 50 aims to trim the capital gains tax deduction that benefits the wealthy. The House legislative staff could not determine how much the bill will raise.
House Bill 51 will restore the sales tax break for a couple of dozen nonprofits that lawmakers inadvertently took away during the first special session. The legislative staff could not say how much this will cost the state.
Senate Bill 6 will raise $17 million by eliminating tax rebates — but not the tax credits — taken by big companies on their inventory taxes. Amendments to the bill raised an extra $5 million on Thursday.
Senate Bill 10 will force companies to choose between claiming the Industrial Tax Exemption or the Inventory Tax Credit, if they receive both. Those that choose the Industrial Tax Exemption, which is far more lucrative, would lose only the refunds they get from the state when their Inventory Tax Credit is greater than their income tax bill.
The corporations would have the opportunity to apply that lost refund to reduce taxes in any of the next five years. Business lobbyists withdrew their opposition after the bill was watered down, suggesting that corporations will find ways to game the new law and pay less in taxes than the expected $57 million.
Rebekah Allen and Will Sentell of The Advocate Capitol news bureau contributed to this report.
Follow Elizabeth Crisp on Twitter @elizabethcrisp. Follow Tyler Bridges on Twitter @tegbridges.