The Democratic governor’s proposal last week to cut state spending by $1 billion — including the near elimination of TOPS — was met with outrage from many on the Republican side.
The GOP theme basically was that from behind a constitutional curtain that requires a Louisiana governor to submit a balanced-budget proposal, Gov. John Bel Edwards’ honest but ugly effort aims to guilt legislators into raising taxes, rather than cutting spending, to cover the projected revenue shortfall when the fifth cent of state sales taxes expires on June 30.
“I thought it was an embarrassment,” Stephen Waguespack, head of the Louisiana Association of Business & Industry, the powerful Baton Rouge-based lobby, told KEEL-AM in Shreveport.
Edwards has been tapping foot for a counterproposal. “I can’t negotiate with myself,” he said.
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Beyond the rhetoric, politics is about the art of the possible.
Even Waguespack had suggestions for handling the budget, such as allocating $175 million, rather than $233 million, for the Taylor Opportunity Program for Students. This would ensure TOPS, the ever-growing grants that help students pay for public colleges and universities, wouldn't be used as trade bait for the rest of the budget, he claimed.
Various factions in the Louisiana Legislature are trying to cobble out a solution in line with House Speaker Taylor Barras’ oft-repeated position that some combination of cuts and revenue enhancements are necessary.
House Republican leaders are expected to release their counterproposals this week.
A final deal will have a little of this and little of that because the Louisiana House needs buy-in from both parties to reach the 70 votes needed to pass most tax-related measures. Republicans hold 61 of the House’s 105 seats and they are far from unified. That means bringing along many of the 41 Democrats. Three members have no party affiliation.
And they all have different needs.
The Legislative Black Caucus hasn’t officially polled its 24 House members but New Orleans Democratic Rep. Joseph Bouie, who heads the group, says his informal conversations suggest that a majority flat opposes any effort to extend the fifth penny past June 30.
Both Democrats and Republicans recently took internal polls of their House members. The Democratic one is making its way around the State Capitol. Republican leaders are holding onto their results. (Majority Leader Rep. Lance Harris, of Alexandria, says the GOP poll was not so much a tally but “trying to get a read on what people are thinking.”)
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Still, more than 70 percent of Democrats, according to the poll and leadership, along with a good many Republicans, according to the perceptions of a dozen interviewed GOP House members, indicate agreement is possible for many of the governor’s proposals, such as making permanent the temporary reductions to credits, deductions and rebates on taxes paid to other states, corporate income tax exclusions, and the value of a few economic development incentives.
Also, there seems to be support for increasing and making permanent the sales taxes paid by businesses and industries for the gas and electricity they use.
But together that only amounts to estimated $140 million against the $1 billion hole in expected revenues.
A possibility, though not as strong, is reducing the amount of excess federal itemized deductions — the amount that exceeds the standard deduction that everyone can take — used mostly by the more well-to-do Louisiana taxpayers. Reducing that deduction from everything to about half its current level would raise another $165 million, according to fiscal estimates attached to past legislative efforts to accomplish the same goal.
Legislators also seem to agree on opposing the big-ticket ideas.
Compressing individual income tax brackets would raise close to $300 million, but it is off the table. And few legislators are on board with charging sales taxes on currently untaxed services, such as insurance and cable television, which removes another $200 million.
A fight could be brewing around which of the more than 180 sales tax exemptions would be eliminated. Cutting all would raise about $215 million total. But that’s not likely to happen, said House Democratic Caucus Chair Rep. Gene Reynolds, of Dubberly.
Majority Leader Harris says that any revenue replacement discussion has to include fiscal reforms. That could be greater transparency for state spending, such as posting on the internet all the checks written to pay for services. Or provisions that would require Medicaid patients to pay doctors and clinics a small amount for each visit, similar to “copays” required of most on private insurance; and requiring able-bodied Medicaid recipients to have a job or be enrolled in workforce training. Harris said he also would like to see a hard spending cap to prevent government expenses from growing every year.
Most of the conversations have been with lawmakers willing to pick and choose from the options of tax increases and spending cuts, Reynolds said.
“I’m an old science teacher. In science you work on the catalyst that can make the experiment go,” Reynolds said. “We’ll know more when we see their (GOP House leadership’s) proposal.”
Email Mark Ballard at email@example.com.