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La. Legislative veto session likely

26th May 2015   ·   0 Comments

By Christopher Tidmore
Contributing Writer

While national media attention focused on Governor Jindal’s executive order allowing Christ­ian-owned businesses to refuse to cater to gay marriages, despite the House Civil Law & Procedure committee voting down similar legislation 10-2, legislators murmured another question.

They asked if State Rep. Cameron Henry’s bill would be enough for Jindal not to veto the revenue raising measures to plug this year’s $1.6 billion deficit? Or will the governor veto the whole budget, and if so, will he do everything in his power to stop a veto override session?

After all, the legislature usually does not call itself into session after ‘sine die’ to defy a gubernatorial veto. Last time it happened, then-Governor Buddy Roemer vetoed State Representative Woody Jenkins’ abortion ban, only to be overridden by a supermajority of the legislature. No one else has matched the feat of calling a veto session, out of terror of gubernatorial retribution, and three decades have elapsed in the interim.

To ward off gubernatorial wrath, Rep. Henry hit upon the idea to phase out the unpopular and uncompetitive Corporate Franchise Tax over a series of years. Under the Byzantine rules specified by Grover Norquist’s Americans for Tax Reform guiding Jindal, the Legislature could phase out a tax over years but enact a so-called “revenue offset” in fiscal 2015-2016 that would permit an equivalent amount of substitute taxes to be increased without risking a net tax hike.

That would allow the House and Senate to hike $140 million in sales taxes this year, which is equivalent to the revenue the state is expected to collect from the franchise tax in 2015. And, then phase out the other business tax over the next decade. Jindal’s Revenue Secretary Tim Barfield seemingly endorsed the idea when he noted that eliminating the Corporate Franchise Tax would improve Louisiana’s tax ranking among the 50 states and simplify the state’s tax code.

That would allow at least part of the budget to be balanced, even if the next Governor would inherit a deficit—should oil prices not improve. However, even the appearance of tax increases could doom Jindal’s chances amongst taxophobic GOP primary voters in Iowa and New Hampshire. Should the Governor veto the legislation, he could do as his predecessors and stop a veto session. Would the Governor employ fear to stop being defied?

Gulf Coast Strategies Lobbyist and legislative insider Brian Trascher predicted to this newspaper, absolutely not. “As of right now, I’m sure [a veto session] is not what the Governor wants, but you know, the Governor doesn’t care. He wants to be able to go to Iowa, and say that he passed eight budgets without raising any taxes. And in the final year, the legislature raised taxes, and he vetoed it. He gets to tell his story, and the legislature gets to tell its story. ‘Hey, we saved this; we saved that.’ The Senate and the House are starting to put on a little more sand, if you know what I mean.”

Jindal has to allow the veto session, even kicking and screaming, because other proposed fixes the Governor does endorse, such as State Sen. JP Morrell’s (D-New Orleans) idea of a constitutional amendment to de-dedicate most of the funds in the state budget and cut across the board, are dead for this year.

“That’s a reform we desperately need,” Trascher continued, “but JP is not really going to push it for this session. He’s looking towards next year…They are really never going to solve anything financially until they have a constitutional convention…and really redo the way entitlements are paid. The entitlements [mandated spending in all areas except colleges and hospitals] are paid no matter what, and they are paid first. That needs to be changed, if anyone wants to have a sound financial way for the state to go forward.” And, the legislative insider observed, will not happen until the next governor is in office — if ever.

The reason the legislators will succeed in their efforts to defy the Governor also boils down to desperation, Trascher observed, “What you have is a bunch of grown men in a urinating match, and the point that they are at financially is a long-time coming. For the last five or six years, they have been kicking the can down the road.”

They have been saying, ‘We’ll worry about that next year. We’ll worry about that next year.’” Next year has arrived and falling oil prices has made things worse, Trascher stated, though the crisis would have occurred regardless. “Oil prices are starting to come back now, but that won’t matter for this year. We can only budget based on projections for this year’s budget.” And that creates a $450 million hole in an overall $1.6 billion deficit.

Still, he added, “It put us from a manageable hole to the crisis we are in now.”

This article originally published in the May 25, 2015 print edition of The Louisiana Weekly newspaper.

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