The state House and Senate remained at a standoff Tuesday over next year’s $24 billion state budget, with all signs pointing to a final showdown Thursday, when the legislative session ends at 6 p.m.
The House on Tuesday rejected changes that the Senate made to seven tax bills previously approved by the House. Those measures would raise about $600 million beginning July 1 to prevent deep cuts to Louisiana’s public health care system and public colleges and universities.
The House’s move sends all the measures to conference committees where three legislators from each chamber will try to settle their differences and present a final version to the House and Senate for approval.
“Thursday’s it,” state Senate President John Alario, R-Westwego, said in an interview. “Ready or not, here we come.”
At stake is state spending for hundreds of public institutions and programs, including LSU, Southern University, the University of New Orleans, Baton Rouge Community College, the soon-to-open New Orleans hospital, Our Lady of the Lake, Lafayette General Hospital, health insurance for 56,000 working poor people in New Orleans and the LSU medical schools in Shreveport and New Orleans.
The disputes center on how much to increase state cigarette taxes and to roll back business tax breaks and whether to approve a much-derided scheme known as the SAVE fund that is needed to keep Gov. Bobby Jindal from vetoing next year’s budget.
Passage of the SAVE fund would allow Jindal to accept tax increases by maintaining his claim that he didn’t raise taxes during his eight years as governor, as he announces his presidential plans on June 24 at the Pontchartrain Center in Kenner.
Alario and House Speaker Chuck Kleckley, R-Lake Charles, expressed optimism Tuesday that they would end the session with a budget acceptable to legislators and the governor. Legislators are trying to close the $1.6 billion budget shortfall with a mixture of spending cuts and revenue-raising measures.
In a worst-case scenario, Jindal would veto the budget, the state treasury would be empty and state government would shut down beginning July 1 when the new fiscal year begins.
More likely, in case the House and Senate can’t agree on a budget deal acceptable to Jindal is that the governor would veto $370 million to $500 million of tax measures. The actual amount would depend on what Jindal deems to be net tax increases.
The budget cuts would fall on the public colleges and universities and the public hospitals, nursing homes and other health care programs on a pro rata basis — unless the House and Senate both can override the Jindal vetoes at a veto legislative session that would begin July 21.
Rep. Chris Broadwater, R-Hammond, was requesting an analysis from the Board of Regents to show his colleagues the potential ramifications of a Jindal veto on the higher education institutions.
Many House members remain undaunted.
“We should rise up and override, the Constitution gives us that authority,” state Rep. John Bel Edwards, D-Amite, a gubernatorial candidate, said in an interview. “Now is not the time to be timid.”
House Republicans will be particularly under pressure to accept the SAVE fund to avoid having to approve measures during a veto override session that would increase the tax burden. That pressure was on display Tuesday when state Rep. Lance Harris was questioned sharply at a luncheon sponsored by the Republican Party of East Baton Rouge Parish about why lawmakers hadn’t made deeper cuts in programs that conservatives dislike.
A burly Republican businessman from Alexandria, Harris said legislators are doing the best they can in a difficult situation.
“You don’t have the LGBT agenda this year,” he said. “You don’t have the pro-choice (abortion) agenda this year. You don’t have the expansion of Medicaid this year. You have gotten everything you wanted as a conservative on the social issues you want. Period. But we still have to govern as the Republican Party when it comes to the finances of the state of Louisiana. And to call some of us liberals because we have to make that tough choice…”
Harris stopped mid-sentence.
“We have taken care of 90 percent of what conservatives want taken care of,” he added.
The key player in trying to reach a budget deal on the House side will be state Rep. Joel Robideaux, a certified public accountant and Republican from Lafayette who chairs the Ways and Means Committee. Under House rules, one of the three conferees comes from the committee that heard the bill. Robideaux’s committee heard each of the seven tax bills.
Robideaux is also the sponsor of three tax bills that the Senate amended to tack on the SAVE fund, which he opposes. He had the House on Tuesday reject the amended measures, House Bills 449, 501 and 829, and send them to conference.
“I’m going to be very busy,” Robideaux confirmed as he rushed out of the House chamber at one point Tuesday. House members were clustered around him at his desk throughout the day.
Robideaux huddled for an hour in the speaker’s first-floor office Tuesday afternoon, as the serious negotiations began, with Tim Barfield, the Revenue secretary and Jindal’s point man on tax issues; Harris, who chairs the Republican House Caucus; state Rep. John Schroder, R-Covington, a leader of the Fiscal Hawks group; and state Rep. Walt Leger, D-New Orleans, the speaker pro tem.
“We got to come to agreement to give something to the Senate,” Robideaux said afterward.
The conference meetings typically take place behind closed doors or in small groups on the House or Senate floor.
The key to any deal appears to be reaching agreement on the SAVE fund, which the Senate and Jindal want and which House members have derided as a phantom tax credit and gimmick.
State Rep. Jeff Arnold, D-Algiers, said Jindal and senators could win over some Democrats by putting more money into the budget for the K-12 public school system. The House approved $50.3 million next year while the Senate is proposing only $11.5 million. The House and the Senate came to a deal on the budget two years ago after Republicans agreed to spend more money on K-12 schools and on Southern and Grambling State universities.
Rep. Alan Seabaugh, R-Shreveport, said the Senate could win over some skeptical House Republicans by agreeing to phase out the corporate franchise tax. Alario has held up a measure to do that, House Bill 828, from winning Senate passage.
“You’re giving away almost $1 billion” over the next five years, Alario said in an interview. “If we give that away, we won’t get it back because to do so would require a two-thirds vote in the future. The next governor will need that money.”
HB828, by Rep. Cameron Henry, R-Metairie, would cost the state $36.5 million next year and progressively more in the following four years to total $912 million.
The House passed one revenue-raising measure Tuesday that now goes to the governor for his signature. House Bill 779 would scale back tax breaks for the installation of solar energy systems and raise $19 million next year.
Of the tax measures that the House rejected Tuesday, House Bill 119 would triple the 36-cent state cigarette tax to $1.08 and raise taxes on other forms of tobacco. In all, it would raise $188 million next year.
The Senate proposed a 72-cent increase while the House approved a 32-cent increase and no increase in tobacco products. The House version would raise $68 million.
“We’re going to get higher than 32 cents,” said state Rep. Harold Ritchie, D-Bogalusa, the sponsor of HB119 and a smoker for the past 50 years.
House Bills 624, 629 and 635 would shave business tax breaks and are sponsored by Rep. Katrina Jackson, D-Monroe, who is the head of the Legislative Black Caucus. As a conferee, she could strike a deal for more spending on the historically black universities that would win over caucus members for the budget.
HB829, following changes by the Senate, would save the state an estimated $70 million next year by capping the film tax credit at $180 million. (The program is expected to cost taxpayers about $250 million this year.) The House’s version would cap the program at $200 million per year and direct more of the tax subsidies to Louisiana-based filmmakers.
During the final negotiations, Capitol insiders give the advantage to Alario and the Senate over Kleckley and the House. Alario, an accountant, has spent 43 years in the Legislature, including two stints as House speaker, and is widely recognized as the political chess master in the Capitol. Kleckley, a convenience store owner who gets good marks as speaker, is completing his 12th and final year in the House.
One legislator said if legislators were playing baseball, Kleckley had the ball while Alario had the bat.
Asked about the analogy, Alario laughed and said, “Sometimes you strike out.”
Mark Ballard, of The Advocate Capitol news bureau, contributed to this report. Follow Tyler Bridges on Twitter, @TegBridges. For coverage of the State Capitol, follow Louisiana Politics at http://blogs.theadvocate.com/politicsblog/.