Budget negotiations: “Offsets” in the spotlight

With less than two weeks left before adjournment, a “well-placed source” tells Jeremy Alford of LaPolitics.com that “everything is in flux right now. It has gotten to the point that every single revenue bill, including the budget, has become a game of chicken between the House and the Senate, and the Legislature and the administration.” The key question is whether the budget and tax package that is sent to the governor’s desk satisfies the “revenue neutral” requirement that Gov. Bobby Jindal and Americans for Tax Reform’s Grover Norquist have insisted on. And that, in turn, has turned attention to tax credits, cuts and other potential “offsets.”

The numbers are so tight that the ability to obtain revenue-neutral status comes down to the success of a single bill: SB 284 by Finance Chair Jack Donahue, R-Mandeville, which creates the SAVE (Student Assessment for a Valuable Education) tax credit. The bill would implement a new fee for Louisiana’s 220,000 university students, but they wouldn’t have to actually pay it. Instead, the university would get a tax credit in the same amount and the state would give them the cash. The bill could be heard in the House Ways and Means Committee as soon as Monday, and would then move to the House floor if approved. But vote-counters doubt the support is there – yet – for the massive tax offset it offers.

The search for offsets is also why the House voted 69-33 on Thursday to phase out the state’s franchise tax on corporations – a move that would cost the treasury $36.5 million next year but nearly $1 billion over five years. While it seems bizarre that legislators are passing massive tax cuts at a time when the state is desperately trying to plug a budget shortfall, those are the rules the governor has set up and some lawmakers are determined to abide.

Here’s a suggestion for policy makers: Instead of passing corporate tax cuts, you could offset some of the revenue increases by approving House Bill 70 by Rep. Walt Leger III, which would help working families across Louisiana by doubling the state’s Earned Income Tax Credit (EITC).

Drivers hit with new fees

Buying a car and renewing a driver’s license in Louisiana would become much more expensive if Gov. Bobby Jindal’s administration gets its way in the current legislative session. As The AP’s Melinda Deslatte reports, two bills are moving through the process that would hike vehicle title fees by $50, and the administration is looking for legislation to attach a nearly $40 increase in the cost of renewing a driver’s license. Combined, the measures would raise $79 million a year from state motorists.

The big-ticket fee proposals come as lawmakers look for ways to scrounge up money for next year’s budget, and as they seek to stop diverting large sums of state gasoline tax revenue away from roadwork to instead pay for state police operations. “We are clearly trying to figure out how to balance the budget, and for me, it’s about more than just balancing the budget. It’s about getting state police out of that transportation trust fund,” said Sen. Robert Adley, R-Benton. More than $345 million in gas tax money from the state transportation trust fund has been steered to the state police in the past decade, and Jindal proposed shifting another $72 million next year even as Louisiana has a $12 billion backlog of road and bridge work.

Equal pay bill dies in committee

The House Labor and Industrial Relations Committee continues to be the place where progressive policy proposals go to die. The latest victims: a bill to require companies with at least 50 workers to pay women the same wages as men for doing the same job; and a separate bill that would have established a state minimum wage and phased in an increase in the wage  paid to restaurant wait staff, bartenders and other tipped employees. The Associated Press was there.

The equal pay proposal, sponsored by Sen. Ed Murray, a New Orleans Democrat, had been backed by the Senate. But Republicans on a House labor committee shot down the bill with an 8-5 vote. Murray’s bill would have prohibited a “distinction in compensation” due to an employee’s gender. It outlined a course for legal action if a worker claims to be underpaid. Supporters said Louisiana has the worst pay gap between men and women in the nation. Critics say the proposal would lead to lawsuits against employers who don’t realize they are paying women less.

Can Medicaid expansion help public safety?

Police officials in Utah believe that taking advantage of available federal dollars to extend health coverage to low-income adults can be a boon to public safety. That’s because expanding coverage through the Medicaid program would mean people with substance abuse and mental health disorders would be more likely to receive treatment – and less likely to commit crimes as a result. The Salt Lake Tribune reports:

Nearly 5,000 police chiefs, sheriffs, prosecutors, and violence survivors belong to the New York City-based Fight Crime: Invest in Kids, with more than 80 of the members in Utah. The group works to put research on how to reduce the risk of children becoming involved in crime when they grow up in the hands of policymakers and the public. … Juergen Korbanka, executive director of Wasatch Mental Health in Provo, said treating behavioral health issues is a logical extension of preventing crime. He cited as an example a wife and mother who began using methamphetamine to deal with an underlying bipolar disorder, became an intravenous drug user, went to jail and had nowhere to go when she got out. When she qualified for Medicaid, she was able to get treatment and reconnect with her family, he said. Salt Lake City Police Chief Chris Burbank had not seen the Fight Crime: Invest in Kids report but supports the group’s mission. “Expansion of mental health treatment in any arena helps to reduce criminal activity and recidivism,” he said.

Number of the Day

$912,500,000 – Five-year cost to the state Treasury of phasing out Louisiana’s corporate franchise tax (Source: Legislative Fiscal Office)