A key provision that would allow Gov. Bobby Jindal to approve the state’s operating budget and the revenue-raising measures that provide the money for the spending plan won final legislative passage late Thursday afternoon.
The legislation now goes to Gov. Bobby Jindal who conditioned his approval of tax measures to the approval of the offset.
House Speaker Chuck Kleckley ruled that a simple 53 majority vote was required instead of a two-thirds required for levying a fee.
The approval cleared the way for legislators to vote on the state budget which they did later in the afternoon.
The SAVE program came to the House floor as an addition to an educational tax credit bill.
It would assess a fee of about $1,500 per higher education student and raise about $350 million total, but only on paper. Students wouldn’t have to pay anything because an offsetting tax credit for the $1,500. Nor would universities receive any new money.
However, the SAVE fund would create a tax credit for the $350 million that Jindal could use to offset $350 million of the new revenue that legislators are proposing to raise.
Republican Rep. Chris Broadwater, of Hammond, acknowledged that the whole SAVE scheme pushed by Jindal was disagreeable.
But Broadwater said he felt it was necessary to ensure Jindal won’t veto the budget or the revenue-raising bills and to protect higher education from deep spending cuts.
“I can’t feel good about this other than the future of higher education in Louisiana hangs in the balance with this instrument,” Broadwater said.
If the “gimmicky” SAVE provision is not passed, Broadwater said “we will decimate it. We will destroy it.” He said higher education will see a $282 million cut, the equivalent to a 36 percent to 40 percent reduction without the measure.
Broadwater said he heard directly from Jindal that he would not veto tax increases if there are offsets like SAVE.
“I don’t put too much trust in what the governor told you earlier, and that’s not directed at you,” Democratic House leader John Bel Edwards, of Amite, responded. Edwards is running for governor.
Edwards said the House has passed the revenues to fund higher education.
He said the “contrived” SAVE act creates a fee students never pay; they get a credit they can never use and the Board of Regents is going to get the tax credits using money legislators put in the treasury for higher education. He urged rejection of the measure.
“It’s pure fiction. It is a gimmick,” Edwards said. “We are being asked to do something so the governor can satisfy a pledge he made to an out-of-state special interest group,” he said.
In closing the budget gap, legislators would have to do it while complying with the anti-tax pledge that Jindal signed in 2003 with Americans for Tax Reform, a national anti-tax group headed by Grover Norquist.
The group’s rules do allow tax increases, Norquist wrote in a letter Monday to Louisiana legislators who oppose the SAVE fund. “Removing tax credits or deductions while reducing the tax rate so that the total bill is revenue neutral is not a tax hike,” he wrote.
That is what led to the emergence of the SAVE fund.
The Senate has signed off on the SAVE credit multiple times on various bills this session.
Debating the latest incarnation of Senate Bill 93 that included SAVE, Sen. Danny Martiny argued that it was the only way to ensure funding for higher education and prevent a veto from Jindal.
“If he tells me to stand on my head and he’ll sign the budget — well, i probably can’t, but I’ll try,” Martiny said.
But some still balked at the idea.
“This is not good public policy,” said Sen. Karen Carter Peterson, D-New Orleans. “It’s a complete farce. I think it’s an embarrassment to the legislative process.”