Strangely, Gov. Bobby Jindal continues to paint himself in a corner as he announced his plans for a presumed revenue excess to be declared on Friday by the state’s Revenue Estimating Conference.
It is anticipated at that time that the Conference will declare excess funds over its prior forecast for this budget year, and also some for next budget year. That means additional monies other than what has been budgeted for this year could be spent this year on recurring programs, and the revenue base for next year’s budget has gone up which may close a predicted deficit at current spending levels.
Jindal wants the Legislature to lay off spending this year’s excess funds. If that happens, that means after July 1 they only could be spent on non-recurring items defined as five different kinds of purposes (probably soon to be six, courtesy of a bill to allow tax rebates to be given out of these funds). He also wants next year’s funds to be treated the same way by an accounting move. In other words, in essence he does not want any of these funds spent on recurring items.
This would put him on a collision course with SB 87, both its original and amended version. Author state Sen. Buddy Shaw intended the bill to provide a permanent tax cut by lowering rates on middle-class taxpayers. State Sen. Nick Gautreaux got it amended to provide a phaseout of all individual income taxes over a 10-year period, a tactic widely believed to be backed behind the scenes by Jindal to make the bill seem irresponsible enough to entice passage by making lawmakers seem willing to cut taxes, and then provide justification for Jindal to veto it. Regardless, both versions would reduce revenues about the same amount next year, around $300 million.
Jindal’s plan would forgo using excess funds to cover that amount. He has said he would support the original version if other cuts could be made elsewhere – and a tempting target to slice is a $307.1 million addition to a “megafund” to attract a large employer the expenditure of which would be a less efficient way to develop the economy than a permanent tax cut and anyway may never get used. The strategy here seems to be to keep the Gautreaux language on the bill as its overall revenue reduction is estimated at $4 billion over those years in order to save the megafund increase and keep revenues in place. In addition, the Jindal Administration defines those monies intended for the megafund as “one-time” and thus should be shuttled away from funds not collected on a recurring basis from a tax cut.
Or, as the presence of floor leaders at the news conference announcing this preference indicated, the strategy could be simply to kill off the bill. Whether any of this will work is another matter. The House, with its 60 of 104 new members many having articulated a desire to support legislation like Shaw had intended, may not let it come to that. They could call Jindal’s bluff and excise the megafund money. Or, even more intriguingly, they could amend the bill to cut income taxes by whatever amount gets declared as surplus and dare Jindal to veto a tax cut that is paid for by the numbers, knocking out the “irresponsibility” argument. Most likely, if they have smarts and muscle, they will tie the two together – force the original SB 87 through and cut the megafund increase in exchange for not putting Jindal in this political pickle.
(One additional strategy presents itself – if floor leaders and the Administration get wind that there may be rebellion in the ranks after the House Ways and Means Committee hears the bill today or perhaps if the vibes really are bad if it doesn’t by getting it deferred, one or more of them may refuse to declare a surplus. The Conference has as three of its four members House Speaker Jim Tucker and Senate President Joel Chaisson, and Jindal but more likely his designee Commissioner of Administration Angéle Davis, . The declaration must be unanimous. Without a declaration, the money doesn’t exist and in effect that would accomplish the rollover of this year’s funds to next as envisioned by Jindal. The news conference also appears to dispell rumors that Jindal might actually sign SB 87 in its current form.)
The intrigue increases but one thing seems sure: Jindal does not appear to believe the revenue enhancements that will come down the road from tax cuts that stimulate the economy are worth the short-term subtracted revenue. This belief must be ironclad for him to put up with the political pressure for tax cuts, and makes one wonder whether he really believes tax cuts inherently are salutary in the first place.
No comments:
Post a Comment