After weeks of wrangling and raising money, the Louisiana House on Thursday takes up a state spending plan full of increased revenues and deep cuts in government services.
Lawmakers are set to gather in various caucus meetings before the House convenes at 9 a.m. Thursday to go over House Bill 1 — the state’s proposed $24 billion budget for the fiscal year beginning July 1.
Much acrimony and rewrites have accompanied efforts to bridge a $1.6 billion gap between spending on services and the revenues available.
The proposal has none of the one-time money — available now but not next year — that caused so much of the budget problems because of its use last year to pay ongoing expenses. There’s money for higher education, but some lawmakers worry there’s not enough for health care.
HB1 does cut support across the board for government agencies — 26.6 percent, or $57 million, lopped off the department that handles state prisons, for instance, and 31.7 percent, or $18.5 million, taken from the agency that tries to bring businesses to the state.
Additionally, representatives increased taxes by 32 cents on a pack of cigarettes and rolled back $615 million worth of tax exemptions and credits that businesses used.
But it was either raise revenues and reduce state agency spending or make draconian cuts in the budgets of colleges and universities as well as health care.
House Appropriations Committee Chairman Jim Fannin, whose name is on the bill that will authorize government spending of taxpayers for next fiscal year, acknowledges that not everybody is satisfied. In fact, a lot of people are angry.
Even though he says he hasn’t run a tally of who is for and who is against, Fannin, R-Jonesboro, is confident that he and 52 others will approve the budget measure and send it across Memorial Hall for the state Senate to consider.
“We’re waiting for them,” Senate President John Alario, R-Westwego, said. He’s not sure right now whether the Senate will have to raise more money and, if so, how much. “Hopefully, it (the budget) won’t be too far out of whack.”
Republican Sen. Jack Donahue, who as chairman of the Senate Finance Committee gets the first look at the legislation in the upper chamber, was reluctant to talk about what he expects from the budget bill, until it is passed by the House.
“We’ll know then what kind of revenue we need,” Donahue said. “We have the revenue bills (passed by the House and awaiting a hearing in Finance) and we’re going to try to make sense of how all this fits together.”
At the same time, Donahue is working with senators and representatives on bills that would reduce taxes to offset the increases legislators have made in rolling back tax exemptions and credits. Following the dictates of the Americans for Tax Reform, the Washington, D.C.-based anti-tax group so influential among GOP politicians, Jindal has said he would veto any tax increase that is not offset by a comparable tax decrease.
Efforts to “stay in the swim lanes” set out by Jindal have frayed tempers and alliances among legislators.
“These swim lanes that the governor set up has made the whole job of balancing the budget that much harder,” said Jan Moller, head of Louisiana Budget Project, a Baton Rouge-based think tank that looks at fiscal issues from the perspective of lower- and middle-income people.
“The bad news is the solutions they’ve come up with, so far, don’t solve the entire problem,” Moller said, allowing that even considering increasing revenues, over the objections of the business community, is something of a sea change for the Louisiana Legislature.
During the past seven years, the governor and the business community got pretty much whatever they wanted from the Legislature. This year, however, lawmakers tapped into the refunds and credits on which some companies relied. Business lobbyists called the rollbacks “tax increases,” a pejorative for conservative legislators, particularly since most of them will stand for reelection in October.
The House earlier raised about $615 million by reducing the money available to businesses from corporate income tax exclusions, franchise tax credits and sales tax exemptions from buying power. The House capped the solar tax credit program and equalized credits for taxes paid other states.
“We feel like we’ve done a good job redirecting the money to higher ed,” said Rep. Joel Robideaux, the Lafayette Republican who as chairman of House Ways & Means committee was a key architect of the budget proposal.
The original budget proposal decreased overall support for higher education about 58 percent from $924 million to $391 million for next fiscal year.
Much of the additional monies raised by the tax increases — as well as additional dollars found last week — will go into the state’s colleges and universities bringing the total funding for higher education to $964 million.
“There are still some holes that a lot of people want to fill. We hope the Senate can fill out the last few pieces,” Robideaux added.
That’s a concern for House Democrats, said Rep. John Bel Edwards, the leader of that party’s House caucus.
“We couldn’t do everything we sought to do,” Edwards said. “We still have concerns about health care. Until we get answers, it’s still too early to say whether we’ll support it or not.”
But Rep. Katrina Jackson, who heads the Louisiana Legislative Black Caucus, said she is confident the Senate will come up with the money that will protect the state’s medical schools and hospitals.
“The House, in the time that was available, corrected as much of the deficit in health care as we could,” the Monroe Democrat said.
“We’re working very closely with the Senate to make sure the final piece of the health care is taken care of.”
Originally the health care budget was touted as being a budget that wasn’t being cut, said Robert Scott, head of the Public Affairs Research Council of Louisiana, a Baton Rouge-based government policy think tank. But the Jindal administration made a lot of assumptions that didn’t accurately describe the reality of expenses.
“Those medical schools fell into a real state jeopardy with the budget,” Scott said. “So, they had to go to some Plan B there has been a lot of discussion since.”