Tax effort guarded public from budget problems

By JOHN MAGINNIS and JEREMY ALFORD

LaPolitics.com

BATON ROUGE — With Gov. Bobby Jindal’s tax repeal package and those like it apparently immobile and parked for the session, lawmakers are slowly turning their attention to where they say it has always been: on the budget.

The $24.7 billion budget proposed by the Jindal administration has many more challenges aside from the $1.3 billion revenue shortfall, many of which lawmakers contend were obscured in the political mists of the governor’s failed tax-swap proposal.

Rep. Herbert B. Dixon, D-Alexandria, called it “troubling” because this year’s session may very well be remembered for the budget it produces, not the tax plans it studied but did not pass.

“This is the time where John Q. Public needs to get very involved,” said Dixon. “They need to come to the Capitol, use the phone, send an email, mail a letter, find a homing pigeon — whatever it takes. Things are about to get really moving here and people are going to be caught by surprise.”

During its first official week on the job, the Appropriations Committee heard wrenching public testimony from parents of autistic children, victims of domestic violence, food bank operators and senior citizens who said another year of budget cuts will make their lives worse.

Not long after, members of the Joint Budget Committee glimpsed a preview of the hospital transformations coming to their districts when they signed off on the first public-private hospital partnership, which preceded the closure of Earl K. Long Hospital in Baton Rouge.

Sen. Sharon Broome, D-Baton Rouge, heatedly protested the transfer of services to Our Lady of the Lake Hospital, which has not announced provisions for women’s services and prisoner care.

“This whole process has been a betrayal of public trust,” she said.

Jindal’s budget relies heavily on contingencies such as refinancing debt, legal settlements, land sales, transferring dedicated funds and health care privatization contracts. So if certain lands are not sold or if other deals turn south, Jindal’s budget could quickly fall out of balance.

For example, the Willis-Knighton Health System recently announced it was pulling out of negotiations at the medical center in Shreveport, the biggest of the public hospitals Jindal is attempting to privatize.

Medical centers in Houma and Lafayette are on the proverbial chopping block as well, with agreements pending.

Conservatives in the House, like members of the Budget Reform Coalition, argue that the budget contingencies amount to one-time revenue, which the Constitution states cannot be used for recurring budget costs.

Reps. Kirk Talbot, R-River Ridge, and Cameron Henry, R-Metairie, filed a lawsuit last year and recently amended it to seek a review on whether Jindal’s proposed budget is unconstitutional on multiple grounds, including non-recurring and contingency funds.

“After looking at the administration’s budget for the upcoming fiscal year, it is clear that it contains the same constitutional issues as the current fiscal year budget that prompted our lawsuit” said Talbot.

Additional legal challenges loom. For instance, the governor wants to use money from an artificial reef fund to prop up education and health care. In response, the state Wildlife and Fisheries Commission, consisting solely of Jindal appointees, is debating possible litigation.

Elsewhere, the popular TOPS scholarship program, according to the current budget bill, would be underwritten largely by the state’s tobacco settlement fund. Never before has state general fund dollars contributed so little to TOPS’ bottom line.

After Jindal delivered his opening remarks to the Legislature last week, the Public Affairs Research Council suggested that, because of the governor’s near-complete focus on his tax swap plan, “All other major concerns facing the state, and all other aspects of tax reform that might be usefully pursued, seem to have been totally eclipsed by this one proposed initiative. The governor made it clear that an income tax repeal is all he wants or expects of the Legislature this session.”

Among the topics not mentioned by Jindal during his roughly 2,000-word opening address were his budget’s $1.3 billion revenue shortfall for the next fiscal year; and the privatization of public hospitals; the funding obstacles faced by the state’s construction program; money for higher education; the future of the state’s Medicaid program; and the court challenges delaying his landmark education and retirement reforms of 2012, which may have to be voted on again this session.

Jindal has not yet offered up solutions to increasing revenue, but he has voiced support for hiking taxes on cigarettes and the political will appears strong in the Legislature to act on that front.

Exactly how high the tax will be, though, remains to be seen.

With or without the a tax repeal plan on the table, House Speaker Pro Tempore Walt Leger, D-New Orleans, a member of the House Appropriations Committee, said it is time for the focus to shift this session.

“The most important bill in this session is the budget bill,” he said.

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