Business tax measures advance in House

Six weeks from today the Legislature will adjourn for the year, and if history is any guide there will be a deal in place to balance next year’s budget. It’s anyone’s guess at this point what the final package will look like. But judging by the bills that moved out of the House Ways & Means Committee late Wednesday, it appears that higher taxes on business – at least temporary ones – will be part of the mix. The tax writing committee advanced several resolutions (which can’t be vetoed by the governor) that would raise much-needed dollars to support critical services by suspending sales-tax breaks that businesses enjoy. The Advocate’s Mark Ballard was there:

Approval of this kind of legislation marks a sharp departure by the Legislature, which during the past seven years under Gov. Bobby Jindal frequently sought to lower business taxes. But lawmakers need to raise about $1 billion as part of a larger plan to close a $1.6 billion deficit in projected revenues. Because state law requires a balanced budget, failing to raise enough revenues could easily translate to deep cuts in financing for public colleges and for health care. Passing all these tax bills is part of the bigger plan, Ways and Means Chairman Joel Robideaux, R-Lafayette, told clearly anxious business and industry lobbyists who packed the hearing room.

Business leaders, not surprisingly, were not pleased by the development. Stephen Waguespack of LABI suggested that legislators should cut retirement benefits for state workers and college professors rather than harm a single hair on industry’s head.

Too much emphasis is being placed on business and industry, but people forget that individuals also received credits and exemptions that have translated into lower taxes, he said. And expenditures, such as the escalating costs of state pension plans, also are draining revenues.  

Perhaps most significantly, Rep. Katrina Jackson announced that a group of tax credits that benefit low-income parents, children and child-care providers – the Earned Income Tax Credit and the school readiness tax credits – will not be reduced as part of any budget deal. That’s because the refundable portion of those credits are used as state match to draw down federal dollars.

Medicaid expansion gets crushed again

For the third consecutive year, the Legislature has rejected attempts to use federal dollars to extend health coverage to low-income adults and save the state money in the process. Members of the health care committees in the House and Senate turned away bills that would have expanded Louisiana’s Medicaid program to cover nearly 300,000 low-income adults. The votes were mostly along party lines, though Sen. Fred Mills of New Iberia broke ranks to support coverage. Gannett has the story:

Jan Moeller (sic) of the Louisiana Budget Project urged the senators to OK the bill. He said other states had saved money by Medicaid expansion, among them Arkansas and Kentucky. He said states were saving by taking advantage of a new influx in federal funds. Phillip Joffrion, state director of the Americans for Prosperity, said states with Medicaid expansions were encountering significant cost overruns. His testimony drew the wrath of committee Chairman David R. Heitmeier, a New Orleans Democrat and an optometrist, who challenged the overrun figures the AFP presented.

Transparency could be coming to governor’s records … next year

The shroud of secrecy that has surrounded Gov. Bobby Jindal’s official records could be coming to an end under legislation that cleared a Senate panel unanimously on Wednesday. The bill by Sen. Dan Claitor would end some of the broad exemptions that have allowed Jindal and his staff to shield their deliberations from public disclosure. But the law, if approved by the full Legislature, would not take effect until a new governor is sworn in next January. As the AP’s Melinda Deslatte notes:

The proposal headed to the Senate floor would keep the governor’s communications with his internal staff exempt from disclosure. But it would get rid of several exemptions introduced into public records law in a 2009 revamp backed by Jindal.Claitor’s bill would remove an exemption that gives executive branch departments a six-month blackout period on budget documents. It also would do away with language that hides records considered part of a governor’s “deliberative process.” Agencies outside of Jindal’s office have claimed that exemption, even though it’s not granted to them in law.

Advocate editorial: Caution on tobacco sale

The Advocate’s editorial board is not happy about the hasty way that Gov. Bobby Jindal’s administration is trying to sell the remaining 40 percent of Louisiana’s tobacco settlement – the latest in a series of moves by this governor to sacrifice long-term financial prudence for short-term cash.

The state would use 80 percent of the lump-sum money to help pay for TOPS, the popular college tuition-paying program that is formally known as the Taylor Opportunity Program for Students. Twenty percent of the proceeds would go to fund coastal restoration projects. “It is a method of borrowing from the future to pay for today’s expenses,” the nonpartisan Public Affairs Research Council concluded, saying the sale process is being rushed by the administration. To advance the deal, Jindal’s Division of Administration rehired the consultants used for the 2001 sale of the first chunk of the tobacco settlement. Why not hire this know-how through a competitive bid process?

Number of the Day

$177,400,000 – Revenue that would be generated for next year’s budget through HCR14 by Rep. Katrina Jackson, which cleared a House committee on Wednesday. The resolution would temporarily suspend a 1 percent sales-tax exemption on business utilities and other activities (Source: Legislative Fiscal Office)