Louisiana Senate approves state government budget bill, but is it the "best solution?" _lowres

Advocate Photo by MARK BALLARD -- Senate Finance Committee Chairman Jack Donahue, R-Mandeville, spars Monday with New Orleans Sen. Karen Carter Peterson, who also heads the Louisiana Democratic Party, about the state's operating budget for the fiscal year beginning July 1.

The Louisiana Senate approved, on a vote of 36 to 3, the state government’s $24.4 billion proposed spending plan for the next fiscal year.

Senators then in quick succession approved bills that would provide funding for construction projects and the Legislature, as well as other financial legislation.

The changes proposed in House Bill 1 by the Senate amount to a 2.4 percent decrease in state spending for the fiscal year that begins July 1, compared to the $25 billion budget for the current year.

Senate Finance Committee Chairman Jack Donahue, R-Mandeville, began debate by pointing out how little time the Senate had to review the budget bill. Senators have met pretty much nonstop for the past few weeks finding revenue and making spending cuts to bridge a $1.6 billion shortfall.

“These votes have been tough,” Donahue said, adding that businesses will pay more in taxes because of the rollbacks in tax breaks legislators of both chambers approved.

“Is this best solution? Probably not,” Donahue said. It gets us to a balanced budget.”

The budget bill now returns to the House, where representatives have voiced problems with the Senate’s addition of wording that would give Gov. Bobby Jindal cover with the anti-tax crusaders, Americans for Tax Reform, and with the doubling of a proposed increase on the tax for a pack of cigarettes.

“This budget reflects so many new taxes and new fees on the people of Louisiana, without a sustainable path,” said Sen. Karen Carter Peterson, of New Orleans and the head of the Louisiana Democratic Party. “They talk about us pretty bad with this fiscal nightmare we created for ourselves … we can do better.”

Speaking for supporters, Sen. Robert Adley, R-Benton, said senators had passed bills that would raise hundreds of millions of dollars and protect higher education.

“We know how much money we passed,” he said.

Adley said legislators should be proud of the work they have done. Most of it came from peeling back exemptions and credits given to businesses, he said.

Roll-backs of several House-passed tax breaks, suspension of some sales tax holidays, and a 72-cent tax increase on a pack of cigarettes and other tobacco products helped add about $929 million in revenues, according to an analysis by the Legislative Fiscal Office.

A typo in House Bill 805 — would reduce the refundable credit on inventory taxes by 75 percent (instead of 25 percent as originally contemplated) and could require legislators to lower the revenue number. But talk on the Senate floor was that a fix could possibly wait until the conference committee meets to hash out disagreements between the two chambers. Legislators must pass a balanced budget before the session ends at 6 p.m. Thursday.

During debate, leaders of the House Republicans, Rep. Lance Harris of Alexandria, and House Democrats, Rep. John Bel Edwards, of Amite, stalked the Senate chambers talking with members of their parties in the upper chamber.

Peterson asked Donahue if the Senate could vote on an operating budget without knowing how much money is available.

Hundreds of millions of dollars are pending in bills that the House has not yet voted upon, Peterson said. She likened the vote to “writing a check without knowing how money is in your account.”

Senate President John Alario, R-Westwego, countered, “We do know. We did know.”

Peterson asked how the state got into this financial situation.

Donahue blamed increased costs and lower revenues tied to decreased energy prices over the past couple of years.

Maybe Louisiana could have done it differently, Donahue allowed, “But that leadership didn’t appear.”

A according to the Legislative Fiscal Office, the bills affecting tax credits would apply to all tax returns and claims received after July 1, regardless of the tax period for which the return applies.

The Senate spending plan includes a $46 million increase in state aid for public schools -- down from the $85 million in the House-passed budget.

The Senate version’s increase would add $40.6 million to answer enrollment increases and $5.4 million to help finance often costly special education assistance. It does not include the $36.2 million increase for all public schools requested by the state Board of Elementary and Secondary Education and endorsed by the House.

If the Senate version prevails it would mark the sixth time in eight years that state aid for public schools is virtually frozen.

The revenue raising measures approved by the House and Senate created enough money to fund higher education with $955.3 million – $605.3 million from the state’s general fund and $350 million from the Higher Education Initiatives Fund. Initially, HB1 decreased support to higher education by 58 percent from $924 million this year to $391 million. But legislators in both chambers scrambled to find enough money to mitigate those cuts.

Money would go into the Higher Education Initiatives Fund through legislation establishing the Student Assessment for a Valuable Education, or SAVE, credit program.

The SAVE language has been attached to several bills working their way through the legislative process.

Wearing a “Just Ask Grover” sticker, Peterson attempted to sidetrack the SAVE plan.

The SAVE scheme would create what many lawmakers have dubbed a phantom fee. Under the plan, the fees would be added to the invoices of about 240,000 students in the state’s public colleges and universities. Students would never pay it. Instead, a tax credit would be transferred to the institution, which would then get payment from the state.

Jindal’s administration has maintained that the wording is acceptable to Jindal and to anti-tax advocate Grover Norquist and his Washington, D.C. based Americans for Tax Reform. On Monday, Norquist released a letter saying he is neither for nor against SAVE.

Donahue argued that removing the language would prolong the legislative effort by pushing Jindal to veto bills crucial to the budget.

Peterson countered, “We’ve been taking the easiest way out for the last seven and half years … Who the hell cares what Grover says?”

Senators shot down the effort on a vote of 13 to 26.

Jindal’s frequent out-of-state travel on campaign-style appearances and to help raise money and support for Republican groups and candidates also attracted changes to the legislation that authorizes state government to use taxpayer dollars to pay state government operations. Jindal is expected to announce on June 24 that he’s seeking the Republican nomination for president in 2016.

The House had added a provision requiring the Governor’s Office to pay the costs of Louisiana State Police security, which includes not only pay and expenses of troopers acting as drivers and bodyguards, but also other costs, such as renting sports utility vehicles. The Senate Finance Committee stripped that facet out of the measure, thereby requiring the State Police to pick up those costs, which the agency said amounted to about $2.5 million.

Peterson asked to restore the provision to the budget bill.

“I’m going to look past who the governor is,” Donahue said, but the state should protect the governor when he travels.

“We all pay for our own campaign travel,” Peterson said, referring to Jindal’s frequent travel to states with early presidential primaries — like Iowa, New Hampshire and South Carolina — for political speeches.

Sen. Danny Martiny. R-Kenner, asked how anyone can tell whether the trip was state-related, politically motivated or a mixture of both.

“Pick a state, maybe Iowa,” he said. The chamber erupted into laughter.

Martiny said legislators shouldn’t take out their displeasure with Jindal by handcuffing the flexibility of future governors.

“You can’t enforce this law against somebody who wants to circumvent it,” Martiny said.

“If you agree with Sen. Martiny, you’re for the status quo,” Peterson said, adding the language is very clear: it prohibits using state funds for campaign travel.

The amendment, which prohibits the State Police for paying for campaign travel, passed on a 29-5 vote, including the support of President Alario.

Sen. Dan Claitor, of Baton Rouge, amended the budget legislation to block what he called an attempt to pull one over on the Legislature.

Claitor said House Concurrent Resolution 75, which gives the next governor the capabilities to expand Medicaid, was presented with the impression that no costs were attached. HCR175, sponsored by House Speaker Chuck Kleckley, was approved by both chambers earlier in the session and signed June 5 by legislative leaders. It did not have to go to Jindal, who has voiced his opposition to the federal Affordable Care Act.

Medicaid expansion is a key part of President Barack Obama’s healthcare law, which is much hated in GOP circles. It would change the qualifications for Medicaid to pick up people who make too much money to qualify for the government insurance but too little to properly purchase coverage on the private market.

But part of the constitutional amendment that allowed HCR75 to set up the Medicaid expansion included a ban on state government lowering funding for public health care. In the law, the level of funding was set in 2013. Since then, healthcare budgets have been lowered.

Once the HCR75 passed both chambers, the Louisiana Hospital Association pointed out the provision in an email to the state Department of Health and Hospitals. Legally, the state needed to increase appropriations by $7.3 million, which would attract federal money.

Claitor’s amendment would ensure that the money would not be added to the budget bill.

“We were misled,” Claitor said sharply.

Sen. J.P. Morrell, D-New Orleans, opposed the amendment saying that it was a way for legislators to upset votes that didn’t go their way.

The amendment was approved on a vote of 27-11.

Check back later with The Advocate for more details.

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