Political Horizons: Jindal tax credit plan under the scope _lowres

Jindal Administration's List of Targeted Refundable Tax Credits

Keeping the message simple has long been the hallmark of Gov. Bobby Jindal’s rhetoric.

During the past couple of weeks, however, legislators have been picking at what it really means to change “refundable” tax credits into “nonrefundable” ones. What they have been finding in the cornerstone of Jindal’s budget plan is a lot more issues than just a chivalric quest against “corporate welfare” that is the governor’s narrative.

Jindal’s idea is to allow taxpayers to apply the credits to what they owe the state and keep the rest — rather than government sending a check to cover the rest, as is the practice now. Voila! The end of corporate welfare. The lagniappe is saving the state half a billion dollars, which becomes available almost immediately.

In their conversations in the halls of the State Capitol, legislators are more and more talking about the inconvenient bit of Jindal’s plan that hasn’t been discussed much: namely, the ability of some of the targeted tax credits to allow taxpayers to “carry forward” to next year’s returns the amount that remains after the credit is applied to the taxes owed this year.

In fact, the Jindal administration has circulated a list of the dozen targeted tax credits, 10 of which allow the credit to “carry forward” and be usable in future years.

How is this not kicking the can down the road?

It’s not really analogous, says House Appropriations Committee Chairman Jim Fannin, whose name is on the bill that will become the state budget for the fiscal year beginning July 1. The state won’t write you a check this year, if Jindal’s plan is enacted, and won’t write you a check next year either, at least under the bills being most discussed now.

But the idea of using the remainder of this year’s credit on next year’s taxes means that the business is profitable enough to carry a tax liability, the Jonesboro Republican said. And if businesses are making money, then that’s good all around for the state and its residents.

Fannin cautioned, however, that right now legislative talk is all over the place. No idea has coalesced as the one.

Republican State Rep. Bryan Adams, for instance, is carrying the legislation that would enable the governor’s plan, and he’s not onboard with the idea of allowing the credits to carry forward.

The former Terrytown firefighter minces no words when saying he does not intend to allow these credits to carry forward, and if somehow his bill doesn’t cover that contingency, it will be changed before passage.

Senate Finance Committee Chairman Jack Donahue adds that carrying forward is not solving the problem. “We’d always be paying it off, year after year,” the Mandeville Republican said.

Politically, however, it’s easier, says Revenue Secretary Tim Barfield, who has become the Jindal administration’s point man on this part of the governor’s plan.

Taxpayers who benefit from the targeted credits have been pretty vocal in their opposition to changing their tax credit, thereby doing away with their annual check from the state. “And they’ll really not be happy if it goes away completely. I understand their anxiety,” Barfield said.

But that’s not why “carry forward” was not addressed in the plan and was only infrequently mentioned by the administration.

Nothing nefarious, no real agenda, Barfield said, other than just wanting to keep it simple.

These targeted credits were enacted at different times by legislators pursuing a variety of goals.

Consequently, Barfield says, the language in the laws that created the credits is all over the board. Some allow for a “carry forward”; others get their authority from oblique references to ancillary laws. Some allow a “carry forward” for five years, others for 10.

So, the administration decided to, basically, write the bills with legalistic equivalent of inserting “non” in front of “refundable,” Barfield said, adding “it was the simplest way.”

Barfield says the administration is willing to go along with just about any idea the legislators have, provided they stay in the revenue-neutral swim lanes: “carry forward” or not; rollback these tax credits or pick some others; or maybe find some other way to balance the budget.

This is Louisiana. Everyone has an idea that if legislators would only adopt, then angels would sing and flowers would bloom. State government is more complex, which is probably why there is more talk than actual plans.

Barfield says he’s heard most of those theories and some of them sound good, could be workable. But, “the plan the governor put on the table is the only one I’ve seen on the table.”

Mark Ballard is editor of The Advocate Capitol news bureau. His email address is mballard@theadvocate.com, and he is on Twitter, @MarkBallardCNB. For more coverage of government and politics, follow our Politics Blog at http://blogs.the advocate.com/politicsblog.