Louisiana’s tax policy in the upcoming legislative session could be shaped with a more heavily guided hand from a Washington-based organization than from the state’s elected lawmakers.
In the halls of the Louisiana Capitol, it’s well-known that Gov. Bobby Jindal runs his ideas on possible changes to the state’s tax structure by Americans for Tax Reform, founded by national anti-tax activist Grover Norquist.
And the outsized influence of the organization, known as ATR, on Jindal’s decision-making is starting to irritate lawmakers as the state faces a $1.6 billion budget shortfall and they are looking for ways to close the gap.
The Republican governor, like 25 of the state’s 144 lawmakers, signed the “Taxpayer Protection Pledge” promoted by Norquist’s organization, agreeing to oppose any tax increases. As Jindal looks for ways to drum up new cash for the budget, he’s working through the confines of what ATR considers a tax increase.
Lawmakers say they’ve been told at meetings with Jindal administration leaders that the governor only will support raising new cash for the state if the ideas don’t violate the D.C.-based organization’s guidance.
That has Republican and Democratic legislators bristling that they’re being artificially limited in searching for budget solutions by a group that has no stake in what happens to Louisiana, rather than have a straightforward conversation about Louisiana’s tax structure and the wisdom of its tax breaks.
“Despite the position of the Americans for Tax Reform, I think Republicans can modify tax incentives to obtain a fair return to the state without going to hell,” Rep. Tim Burns, R-Mandeville, said on his blog.
Sen. Fred Mills is listed as a signer of the anti-tax pledge, though he said he doesn’t remember committing to it. He said it won’t guide his decisions.
“I’m looking for what’s best for the state,” said Mills, R-Breaux Bridge. “I’m not going to worry about some out-of-state firm that’s going to list it on a scorecard. It’s ridiculous.”
Adhering to the anti-tax vow could be a valuable talking point for Jindal if he decides to enter the 2016 presidential race. Jindal shows no sign of shifting positions, despite the grim budget situation.
“The governor takes his pledge to the people of Louisiana not to raise taxes seriously,” Jindal spokeswoman Shannon Bates Dirmann said in a statement.
Dirmann downplayed suggestions ATR was driving the governor’s proposals, saying: “We consult with Americans for Tax Reform on different ideas just as we consult with many other groups interested in tax policy.”
Patrick Gleason, ATR’s director of state affairs, said the organization speaks with gubernatorial and legislative staff around the country about tax policy.
“Louisiana is no different,” he said.
Asked about the criticism from lawmakers, Gleason replied: “All we’re doing is exercising our First Amendment rights. Legislators are free to disagree and make their case to their constituents.”
Jindal’s $24.6 billion budget proposal toes the line in what’s allowable by ATR’s parameters.
The governor is recommending the state scale back refundable tax credits, in which the state pays out more than the taxes owed, and use the $526 million in savings to pay for colleges and health services in the fiscal year that begins July 1.
Businesses slammed the idea as a tax hike. Jindal calls it a reduction in state spending. ATR publicly sided with the governor.
In another complicated maneuver, Jindal proposes to generate new money for colleges by raising student fees, covering the higher costs with a tax credit and paying for the tax credit with a boosted cigarette tax. It wouldn’t be a net tax increase, so it would meet ATR’s standards.
In a written commentary, Barry Erwin, president of the nonpartisan Council for A Better Louisiana, described that as among the governor’s “convoluted proposals that are manufactured to fit a certain definition of not raising taxes, but seem more like something out of the theater of the absurd.”
While lawmakers criticize the ATR rules, they acknowledge they’re factoring the parameters into their own negotiations over how to craft next year’s budget in the legislative session that begins April 13. If they’re not willing to override the governor’s veto, they’re boxed in by Jindal’s anti-tax pledge whether or not they like it.
In a letter to LSU’s student newspaper, Democratic political consultant James Carville, who lives in New Orleans, said Louisiana’s elected officials have allowed Norquist “to become the most powerful person in our state.”
Melinda Deslatte covers the Louisiana Capitol for The Associated Press.