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29.4.08

House, Jindal must intervene to save income tax reversal

Senators battled for the soul of the state’s people and taxpayers in today’s dealing with SB 87 that showed off some great fireworks. State Sen. Buddy Shaw’s bill would phase out in a few years the increase in income taxes that came as part of the “Stelly” Plan. The Democrat-controlled Senate took this as an opportunity to fight back against tax cuts in particular, and Gov. Bobby Jindal and Republicans in general, demonstrating classic legislative shenanigans fully compliant with the state’s history of populism.

The big point of contention came when state Sen. Nick Gautreaux sent up an amendment that would phase out income taxes entirely over 10 years. Shaw and state Sen. Robert Adley were persistent critics, accusing Gautreaux of trying to sink the bill which he consistently denied. After all the shouting died down, it passed 19-18 with mostly Democrats in favor (just state Sens. Bill Cassidy and Steve Scalise in favor as Republicans) and most Republicans and a few Democrats against. (Sen. Julie Quinn missed the day’s votes; being a Republican unless she indicates otherwise she might have provided the 19th vote against and had the bill go clean.)

State Sen. Joe McPherson has the most interesting comments. He said he voted for the amendment, and pointed out that Gautreaux actually held his vote his own amendment band essentially tricked him into voting for it, because he wanted to be on the record for getting rid of income taxes. By contrast, he noted that all the other Democrat amendments were withdrawn meaning they were disingenuous. At the same time, he said Gautreaux was sincere in trying to get his amendment into law, which he has introduced as separate legislation before. Still, the matter should be repealing Stelly, not the larger matter of income taxes, and therefore he would vote for Shaw’s amendment to undo.

Gautreaux opposed the Shaw undoing the amendment, and said if Shaw wanted, he could try to undo it in the House. “Say no to drugs!” he closed, maybe referring to earlier comments made by state Sen. Troy Hebert about “drinking Kool-Aid” of tax cutting, in which Hebert also criticized (using a mispronounced name) talk show host Moon Griffon for stirring the public in favor of tax cuts and said “Griffin” passed along untruths on the air. (Hebert authored SB 409 which would try to force commentators like Griffon to submit to stringent campaign finance reporting requirements.)

The vote to redo came, and it failed 18-20 (State Sens. Democrats Jody Amedee and Butch Gautreaux and Republican Mike Michot switched to vote against while Democrat McPherson and Republicans Scalise and Cassidy switched to vote for, with state Sen. Ann Duplessis voting against having having missed the first vote.) This prompted McPherson to castigate the Senate, saying that regardless of the vote voters for the Gautreaux Amendment and against the Shaw Amendment would be portrayed as against tax relief, as well as apologize for giving the former life in the first place. Others came to the podium and said they would support the amended bill, and let the House deal with it. Not surprisingly, it got 36 co-authors and passed 38-0 as everybody scrambled to score some propaganda points.

This puts the House in an interesting position. No doubt the loss of revenue, $4 billion by the time all income taxes would go off, would be difficult to overcome. At the same time, House members may be reluctant to strip the bill of the amendment even as it makes it a clean vote against the Stelly income tax changes, out of fearing to be seeming against elimination of the income tax. Additionally, the Jindal Administration, which appears to have come around to support Stelly reversals on income taxes, appears unlikely to take such a drastic step as the bill in its current form proposes. How can the House create a process where at the least the original bill gets passed, yet there remains the chance to pass the amended version and perhaps more, while at the same time avoiding political fallout as being tagged as being “against” eliminating income taxes.

The answer is to strip SB 87 of the amendment and place its text onto another House bill (because, whether this was intended when last week SB 87 was delayed until this week the due date to file new bills expired in the interim). Because of germaneness requirements in the House, this leaves very few candidate bills but two that could work are by state Rep. Kay Katz, HB 483 and HB 510 which alter income tax requirements on retirees (which have passed committee and therefore would have to be amended on the House floor; currently, they wait to be called). This way, House members can vote for a clean SB 87 and then say they have a chance to vote on the substance of Gautreaux’s amendment on another instrument. Republican Speaker Jim Tucker may favor this approach and rule such amendments are germane if challenged.

The problem comes when a conference would have to be called to resolve bill wording differences. Sen. Pres. Joel Chaisson voted for the Gautreaux Amendment and against the Shaw Amendment, and he would appoint the three Senate conferees. If as his votes indicate he prefers to see the bill killed, he will appoint at least two opponents of it which will ensure no agreement will be reached and the bill will die.

Here is where Jindal, who at best has been passive to this point about SB 87, needs to get involved. If the House can maneuver out a clean bill, he must put pressure on Chaisson to adopt the House’s cleansing. He can get Chaisson to appoint the likes of Shaw and Adley who already have spoken for a clean bill and risk no approbation as a result to the conference. But without Jindal’s intervention, that may not happen.

And, as a result, because of this fine display of populist tradition in having cake and eating it, too, Louisiana may get no income tax relief whatsoever.

3 comments:

Anonymous said...

Dr. Sadow,

Apparently, you weren't in the Senate today. Jindal's people were the ones working to amend the bill to kill it. It was amended just like he wanted it.

Senate aide

Anonymous said...

Jeff,

HB 483hasn't been heard by any committee. It has not even been introduced. It sits where it does because it does not conform to the constitutional requirements for introduction in the session. It doesn't make any difference because as Senate Aide said, Governor Jindal is opposed to giving us a tax break.

K

Jeff Sadow said...

To digest the above comments: sources indicate it is the Administration that encouraged the hitchiking Gautreaux amendment, and that the Administration would oppose using the Katz bills as vehicles to split the issue, i.e. leave clean bills one to undo Stelly, the other to eliminate the individual income tax.

If so, this is going to be really a major mistake by Jindal. The impetus clearly is there for some kind of Stelly undo and why he will not accept it seems totally contradictory to his governing philosophy -- especially in light of a likely growing surplus. Worse, what if the House does not strip the language and sends it to Jindal as is? By a veto, he then set himself up to totally discredit himself, making it appear he'll talk a good game but not deliver.

If this is the accurate scenario, then does he depend upon the House leadership to be his hatchet men? That would be a tall order for Tucker and that crowd who also have talked up the need for tax relief. They can strip the bill of the amendment in the name of prudence, but it still ends up undoing Stelly which, according to the above testimony, Jindal does not want, so he would lose again under this scenario.

If this is the thinking of the Jindal Administration, I can't fathom why they are boxing themselves into a no-win corner.