June 11, 2015
By MELINDA DESLATTE
BATON ROUGE, La. (AP) – Louisiana lawmakers wrapped up this year’s legislative session Thursday with a last-minute deal on next year’s $24 billion budget that will keep public colleges and health services from deep cuts – and that meets Gov. Bobby Jindal’s criteria to escape a veto.
The deal was struck and approved in the 60-day session’s chaotic final hours, with the House and Senate agreeing to Jindal’s demand that they create a tax credit on paper to protect the Republican governor’s anti-tax record.
Support of the tax credit maneuver, in a 30-9 Senate vote and a 59-43 House vote, ended one of the main sticking points in negotiations and paved the way for passage of the budget for the fiscal year that begins July 1 and the tax plans that will finance it.
Lawmakers agreed to raise taxes, shrink tax breaks and scale back business subsidies to drum up about $700 million for the budget. The House and Senate resolved disputes on the tobacco tax, agreeing to a 50-cent tax hike that will boost the per-pack tax rate to 86 cents and to charge a new tax on electronic cigarettes and vapor products. The House also agreed to a Senate-approved $50 fee increase on car buyers to raise $60 million annually.
“We have done incredible work,” House Speaker Chuck Kleckley, R-Lake Charles, told lawmakers.
Jindal made rare appearances in both the House and Senate amid the ongoing negotiations.
Expected to announce his presidential campaign in two weeks, the Republican governor threatened to veto $370 million in bills he considers tax increases, unless lawmakers agreed to offset them with what he considers a tax cut. He’s closely guarded his record on a no-tax pledge he signed with an organization led by national anti-tax activist Grover Norquist.
Without the money from those bills, heavy cuts would have fallen on public colleges.
To satisfy Jindal’s terms, lawmakers agreed to create a tax credit – called SAVE – that doesn’t raise new money or cut anyone’s taxes, but can be used for Jindal to claim an offset against other tax hikes used to balance the budget.
Senators went along with the plan easily, but House members balked until Thursday, passing it less than two hours before the legislative session had to end.
Rep. Chris Broadwater, R-Hammond, urged his colleagues to vote for the tax credit maneuver, saying it would spare higher education from steep reductions. But even Broadwater said he was embarrassed about the legislation.
“I will swallow my pride. I will choose to be embarrassed knowing that I stood and fought for higher education to the very end,” he said.
Critics called the SAVE tax credit a deception to the public, designed solely to benefit the governor’s White House ambitions.
“This scheme doesn’t raise a single red penny to what’s available to higher education, not one. It is a pure fiction. It is contrived. It is a gimmick,” said Rep. John Bel Edwards, leader of the House Democrats.
Getting his wish on the budget deal was a rare victory for Jindal this session. Lawmakers rejected two centerpieces of Jindal’s agenda: a push to give special protections in state law to people who oppose same-sex marriage and his effort to strip the Common Core education standards from Louisiana’s public school classrooms.
Lawmakers opened the session in April, grappling with a $1.6 billion budget shortfall.
“This is probably one of the toughest legislative sessions that anybody in this building has faced in many, many years – in decades,” Kleckley said.
The problem was largely of their own making. Jindal and lawmakers balanced this year’s budget with $1.2 billion in patchwork financing from property sales, legal settlements and other one-time sources of cash. The dollars aren’t expected to reappear next year, creating most of the shortfall they have struggled to fill.
And in many ways, the budget deal will be another short-term fix. Legislative leaders put a three-year expiration date on many of the tax bills.