One week before the 2015 session ends, legislative leaders scrambled Thursday to find a way to balance next year’s state budget while raising enough new revenue to prevent deep cuts to higher education institutions and public health care, all without provoking a veto by Gov. Bobby Jindal.
Plans to approve a budget acceptable to the governor were upset Wednesday when a House legislative committee narrowly defeated a gimmicky tax measure that Jindal needs to accept revenue-raising measures that are built into the budget.
The House Ways and Means Committee’s decision put the Legislature on a collision course with Jindal over the budget that legislative leaders want to avert.
It also frayed relations between a majority of the Senate, which does not want a confrontation with the governor, and the House, which is increasingly anti-Jindal. A move is afoot in the House to gather enough signatures from members to pledge to override a gubernatorial veto.
Meanwhile, the legislative budget process took another step forward Thursday night when the Senate Finance Committee advanced the state’s spending plan for the fiscal year that begins July 1. Without objection, the committee sent its version of the budget to the full Senate, where it is expected to be heard on Monday.
Senate Finance Chairman Jack Donahue, R-Mandeville, started off the hearing by pointing out that only nine days have passed since the House approved House Bill 1, the state budget. “It was a Herculean job,” Donahue said.
The committee found enough money to pay for $123 million in costs the lower chamber had recommended but could not fund, plus another $120 million or so of services and programs the Senate wanted.
The additional $240 million or so came from a number of different sources, including doubling the increase in taxes on a pack of cigarettes from the 32 cents the House proposed to 64 cents and increasing the cost of titles for motor vehicles.
“It’s all very fluid,” Donahue said after the hearing. Tweaks and adjustments are still likely as the numbers firm up.
The Senate plan is similar to the spending proposed by the House.
The Senate added money to replace some but not all of the New Opportunities Waiver slots — to help the developmentally disabled stay at home rather than go to an institution — that were eliminated in mid-year budget cuts. There was additional dollars for Southern University and to help open a youth facility in Acadiana. But, for the most part, spending is similar in both proposals.
Once approved in the Senate, the budget must return to the House for approval of the Senate changes. The final budget must be approved by 6 p.m. on June 11 when the Legislature adjourns.
To move toward that goal, Senate President John Alario, R-Westwego, huddled in his office Thursday with House Speaker Chuck Kleckley, R-Lake Charles, and state Rep. Jim Fannin, R-Jonesboro, who chairs the House Budget Committee.
“We both made our points,” Alario said in an interview. “Now it’s time to work together.”
Fannin echoed that view and said, “We’ve got plenty of time left to get everything done.”
Kleckley expressed concern whether lawmakers will find ways to raise the additional money they need for public college and university programs and for the public health care system.
Kleckley said he was sure that lawmakers would pass a balanced budget by June 11. Asked whether it would be acceptable to Jindal, he replied, “You’ll have to ask him that question.”
If Jindal vetoes the budget, he and the Legislature would enter difficult and complicated waters. No governor has vetoed the budget since the adoption of the state constitution in 1974.
Under that constitution, the Legislature could override Jindal with a two-thirds vote in both chambers. But under the constitution, lawmakers could not hold that override session until July 21, or 40 days after the legislative session ends.
The new fiscal year begins on July 1, so a veto by Jindal could leave the state without funds for three weeks, unless money left over from June is somehow stretched into the following month, budget officials said.
The possibility of no budget puts at risk funding for LSU and all the other public colleges and universities; the feeding and care of inmates at Angola and the other state prisons; patient care at the public hospitals; and all the other services that state dollars pay for.
Lawmakers have to close a $1.6 billion projected budget deficit next year. They are moving to do so through a combination of spending cuts and an estimated $735 million in revenue increases — which would be achieved by rolling back business tax exemptions and raising the cigarette tax.
The higher taxes are the rub for Jindal. He has pledged to veto the budget unless all of the tax increases are offset by tax decreases, as mandated by Grover Norquist’s Americans for Tax Reform, a rabidly anti-tax group that holds sway with conservatives.
Senate Bill 284, which would create the SAVE fund, offers the best chance to create Jindal’s tax offsets. It would impose a fee on students that they wouldn’t actually have to pay because it also would create an offsetting tax credit for the same amount. Jindal would use that tax credit — worth perhaps $350 million on paper — to offset $350 million or so of the revenue-raisers the Legislature is approving.
Critics call the fee “fictitious” and a “shell game.”
Ways and Means defeated the SAVE fund on a 10-9 vote, with the committee chairman, state Rep. Joel Robideaux, casting one of the “no” votes.
Hours later, Finance Chairman Donahue, the SAVE fund’s sponsor, retaliated against Robideaux, R-Lafayette. Donahue, R-Mandeville, got his committee to tack the SAVE fund onto three of Robideaux’s bills.
“The SAVE fund is important to get the budget signed,” Donahue said in an interview Thursday, before adding, “I’m not a big grenade thrower. I like to make things work.”
Of the Robideaux measures, House Bills 449 and 501 would offer tax breaks to Bell Helicopter in Lafayette. House Bill 829 would reduce the tax subsidy for filmmakers and aim to direct more of the benefits to Louisiana-based companies.
On Thursday morning, Robideaux sought to out-maneuver Donahue by getting the full House to attach his film tax credit bill onto two measures sponsored by state Sen. J.P. Morrell, D-New Orleans. Those measures, Senate Bills 105 and 106, are aimed at curbing abuses in the film tax credit program.
“It’s just a part of the process,” Morrell said afterward.
Robideaux also got the House to attach the Bell Helicopter tax break to Senate Bill 272, sponsored by state Sen. Dale Erdey, R-Livingston.
Tim Barfield, the state revenue secretary who is Jindal’s point man on tax issues, said he was optimistic that the Legislature would find a budget plan acceptable to everyone.
“A lot of gamesmanship needs to play out,” he said in an interview. “We just keep grinding away.”
Mark Ballard, of The Advocate Capitol news bureau, contributed to this report. Follow Ballard on Twitter, @MarkBallardCNB. Follow Tyler Bridges on Twitter, @TegBridges. For more coverage of the State Capitol, follow Louisiana Politics at http://blogs.theadvocate.com/ politicsblog.