On Monday, the House Ways and Means Committee approved a proposal that would kill Louisiana’s solar energy tax credits after passing two other measures that would keep the tax break alive but trim it in different ways.
On Tuesday, the committee approved three different measures, each one creating a different dollar cap on the amount that film and television producers could claim in tax subsidies each year.
On Wednesday, Ways and Means approved a measure that would reinstitute one penny of the sales tax on business utilities and another measure that would reinstitute the 1-cent tax not only on business utilities but also on a wide range of other business activities.
What’s behind the contradictory actions each day?
The answer is both simple and complicated.
Legislative leaders say Ways and Means is approving virtually all revenue-raising measures that come before the committee — even if they conflict with one another — to give lawmakers a multitude of ways to try to find the money needed to close a projected budget shortfall of $1.6 billion. All of the tax measures are now before the full House and could be voted on as early as this week.
“The smart thing to do is to keep all of our options open,” House Speaker Chuck Kleckley, R-Lake Charles, said in an interview.
That’s the simple part because most members of Ways and Means have agreed to this approach, as evidenced by the number of bills shooting out of the committee, even, in some cases, over the objections of the powerful business lobbies that legislators usually don’t cross.
The complicated part is that legislative leaders don’t yet have a clear strategy on which taxes they will actually try to raise — and at what amounts — when the measures go before all 105 House members. Enough legislators could maintain their long-standing distaste for raising taxes to sabotage the plans.
“It will be interesting to see what the folks on the floor do,” said state Rep. Jim Fannin, R-Jonesboro. “I need some revenue.”
Fannin chairs the Appropriations Committee, and he said his panel will not approve its version of the state budget for next year until committee members know how much money the House is willing to raise by increasing taxes or cutting business tax breaks.
House leaders will sort out in the coming days which bills to push on the floor.
“I’m getting a little nervous,” said state Rep. John Bel Edwards, D-Amite, who as chairman of the House Democratic Caucus will play an important role in what the House ultimately decides. “There is no coherent strategy.”
Measures to raise taxes or fees will need a two-thirds vote — a high bar — to win approval.
“It’s sort of chaotic at this point,” said state Rep. Brett Geymann, R-Lake Charles, a leader of the anti-spending crowd.
Undergirding the legislative effort is the conclusion by most lawmakers that they cannot balance the budget simply by cutting spending because that would gut college and university programs as well as public hospitals.
The seriousness of the situation was underlined by recent headlines when http://theadvocate.com/sports/lsu/12257191-123/sp-puts-colleges-on-negative">LSU withdrew from a bond deal after investors became antsy about financing new residence halls and again when a national credit rating firm warned about investing in other Louisiana colleges — in both cases because of the budget crisis.
University officials are developing contingency plans that would allow them to take the extraordinary step of laying off professors who have tenure.
To many legislators, raising taxes is the price that must be paid to avoid the potential draconian cuts to LSU, Southern and the other public universities and colleges.
Fannin is not the only legislative leader whose next move depends on what happens in the full House.
Senate President John Alario, R-Westwego, has been holding on the Senate floor a controversial measure approved by a Senate committee two weeks ago that would save about $600 million per year by making changes to Louisiana’s inventory tax.
“I need to see what revenues come out of the House before we can move forward,” Alario said in an interview.
He hopes House leaders won’t dawdle. “This clock will move faster than they think,” said Alario, the dean of the Legislature, with 43 years of experience.
The Legislature has until June 11 — the final day of the session — to pass the budget.
A key architect of the House’s revenue-raising plans is Rep. Joel Robideaux, R-Lafayette. He has had to assume the uncomfortable role of shepherding the tax bills through Ways and Means because he chairs the committee.
On Monday, Ways and Means approved 15 of the 15 bills it voted on. On Tuesday, seven of seven. On Wednesday, four of six. Virtually all of the bills would raises taxes in one form or another.
Robideaux noted that sponsors of the various tax bills include conservative Republicans, white Democrats and African-American Democrats.
For example, Ways and Means on Monday approved a measure by Rep. Chris Broadwater, R-Hammond, that would prune the tax credit given for installing solar energy (House Bill 817). That came minutes before the committee approved a harsher version (House Bill 779) by Rep. Erich Ponti, R-Baton Rouge.
Immediately afterward, the committee approved House Bill 510 by Rep. Ted James, D-Baton Rouge, that would end the solar energy tax credit as of July 1.
On Tuesday, Ways and Means approved bills capping Louisiana’s 30 percent tax subsidy for film-makers at three different annual amounts.
House Bill 704 by Rep. Ledricka Thierry, D-Opelousas, would establish a $150 million cap. House Bill 829 by Robideaux would keep it at the current level of $226 million. House Bill 276 by Rep. Lance Harris, R-Alexandria, sought to phase out the subsidy, but it was amended instead to limit the credits to $200 million per year.
“We’re using a more inclusive strategy,” Robideaux said. “It gives us the best chance to come up with a different solution on the floor.”
Thierry and James are members of the Legislative Black Caucus, which has had little success in recent years in passing tax bills through Ways and Means.
“It’s a huge change,” James said. “The Legislature wants to take a real look at tax expenditure bills this year.”
One high-profile measure that Ways and Means deferred last week was House Bill 366 by Rep. Bryan Adams, R-Terrytown. Adams’ bill would eliminate refunds that businesses have been receiving from the state for 12 different taxes, including the inventory tax.
Adams filed the bill at the behest of Gov. Bobby Jindal, who has said the measure would save the state $526 million per year in tax breaks that the governor has labeled as “corporate welfare.”
The Legislative Fiscal Staff has complicated matters by reporting that HB366 would save only $81 million next year, with the big savings coming in future years.
Adams’ bill is now scheduled to be heard on Monday, along with 10 other bills that would raise revenue. Several of the measures would make changes to the state inventory tax, which businesses pay to local governments and then get refunds from state government for the taxes they pay to the locals.
So repealing the inventory tax — as the Senate Finance Committee voted to do two weeks ago — would save the state about $600 million per year but would cost local governments a similar amount. Legislative leaders have said they would not repeal the tax without offsetting the money that local governments would lose.
Follow Tyler Bridges on Twitter, @TegBridges. For more coverage of the State Capitol, follow Louisiana Politics at http://blogs.theadvocate.com/politicsblog/.