Reworked budget plan takes shape in La. House
BATON ROUGE, La. — The Louisiana House coalesced Thursday behind a rewritten, $24.7 billion budget compromise that dumps many financing plans sought by Gov. Bobby Jindal in favor of cuts to tax breaks and dollars expected from a tax amnesty program.
House Speaker Chuck Kleckley, R-Lake Charles, said he was confident the bipartisan plan could win passage when lawmakers debate the package of bills Friday. Jindal opposes pieces of the proposal that he considers a tax hike.
Lawmakers would strip $500 million in uncertain funding proposed by Jindal for the 2013-14 fiscal year that would tie ongoing operating expenses to items that haven’t yet happened, such as property sales, and that would only exist for one year.
In its place, lawmakers are considering $63 million in reductions to tax break programs and $133 million in cuts to state agencies, changes that they say could last multiple years and provide more stability to the annual budgeting process.
To make the figures work, however, the plan would make its own assumptions. It includes $90 million in improved revenue estimates that haven’t yet been projected — and millions of dollars in anticipated taxes collected through an amnesty program for delinquent payers, including $200 million next year.
Kleckley and leaders of the Republican delegation, the Democratic caucus and the black caucus stood together on the steps of the state Capitol to promote the deal Thursday.
They praised the bipartisan work and cited the compromise as a “game changer” for legislative independence in a state where the budget passed by lawmakers usually resembles what was submitted by the governor.
“There have been some bumps in the road, but because of the importance of this issue, because of the importance of the citizens of Louisiana, we have managed to bridge that gap and solve some of the challenges,” Kleckley said.
An earlier compromise proposal that included $329 million in cuts to tax break programs ran into opposition from House Republicans because of concerns about the implications on certain industries. Jindal and business groups derided the plan as a hefty tax hike on companies and worked to kill the proposal.
Even as he acknowledged his opposition to parts of the rewritten plan, Jindal commended the House for abandoning the prior version, which he described as a “job-killing tax increase.”
“I know there are families and businesses across Louisiana breathing a collective sigh of relief,” the governor said Thursday.
The new version would use ideas once proposed by Jindal in his now-shelved tax swap plan, including cuts to film tax credits and to the Enterprise Zone business tax break.
“This is a very balanced (plan), it’s a very modest step forward,” said Rep. John Bel Edwards, D-Amite, chairman of the House Democratic Caucus.
However, Jindal said he would veto any part of the plan that would generate new state revenue without cutting taxes elsewhere. He considers limits on tax break programs a tax increase and suggested that tag would fit about $40 million generated by the House plan.
“Anything that continues to be a net tax increase, we would oppose that every step of the way,” Jindal said.
Rep. Tim Burns, R-Mandeville, described the proposal on his blog, saying it would “help prevent further cuts to higher education and health care by closing corporate tax loopholes.”
The proposal includes:
—Caps on the salaries of out-of-state workers and new limits on the production expenses that could be used to calculate the value of a film tax credit for a production.
—Changes to the Enterprise Zone program that would prohibit credits to big-box retailers in the targeted disadvantaged zone and that would require eligible companies to provide full-time jobs and hire a larger number of area workers.
—Limits on solar tax credits, to apply to only one installation per residence.
—Caps on a program that pays vendors a percentage of the sales taxes they collect and remit to the state.
—Changes to the severance tax break for inactive wells.
Rep. Joel Robideaux, R-Lafayette, chairman of the House tax committee, said he hasn’t heard much pushback from business groups about the revised plan.
“There’s been some concern out there by the groups that are being affected, but at the end of the day, I think most of the business groups realize it could be much worse,” he said. “None of the changes we’re proposing have a detrimental effect to normal operations.”
The reworked plan would include a three-year amnesty period for delinquent taxpayers, to give them the ability to pay their overdue taxes with lessened penalties as a way to generate upfront cash for the budget.
By MELINDA DESLATTE