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4.3.08

Jindal takes risks in surplus special session call

The call for the 2008 Second Extraordinary Session of the Louisiana Legislature as issued by Gov. Bobby Jindal contains some great ideas, but also some risks for the governor as he tries to do what’s right for the state and build some political capital for the most difficult battles to come.

The call contains two types of items. One deals with the distribution of a $1.088 billion surplus from past budget years into items that are pretty uncontroversial and will end up largely the way he desires them. The remainder, exclusive of a few business tax reductions with popular support, contains a couple of riskier items that, if he does not succeed, might impair his ability to make bigger changes during the regular session.

One is stating legislation will be forthcoming dedicating vehicle sales taxes to transportation capital expenditures. The call allows from legislation shifting nay transportation-related revenues from the general fund to only transportation-related capital outlays. At “only” $30 million, it is less than tenth of the overall revenues collected from transportation-related revenues, but appears to be the advance guard of an all-out effort to shift all of them over. The Jindal Administration may be figuring that it has to get the Legislature to swallow a small portion of the shift, which will mean reduced revenues for spending on other recurring expenditures in state government, before it will take the whole package. But a failure on this now might imperil a move involving everything later.

The other is even riskier, opening up the session to deal with a surplus of recurring revenues of nearly $1 billion that Jindal already has said will be used for many other purposes, in order to deal with, besides the business tax breaks, a specific piece of legislation for “individual income tax deduction for tuition associated with attendance at elementary and secondary schools and for qualified educational expenses for parents of home-schooled students.” This is an attempt to provide tax credits for students schooled in private schools or at home, and while a good reform to improve education in the state, will be bitterly resisted by teachers unions and others who are vested in promoting their members interests rather than better education.

This part of the call also could open the door to a number of other proposals to spend funds on recurring items, but Jindal no doubt will inform legislators vetoes will come the way of bills of this kind that do not match his philosophy. Still, if the specific item for which the call addresses does not pass, again this could diminish Jindal’s power to get bigger things through in the regular session.

The absolute safe play would have been to restrict the session only to the non-recurring revenues. Opening it up to more shows Jindal is willing to play a little bigger in the hopes of winning bigger down the road. But it also potentially means bigger losses if he can’t pull these off before the end of the month.

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