Questionable fee bill provides Jindal with interesting test

Gov. Bobby Jindal may have an interesting call ahead on a pair of bills that might put to the test his avowed anti-tax, but pro-fee (when demonstrated as necessary to cover costs) position regarding government revenues.

In his fifth year in office, Jindal staunchly had headed off every tax increase of any kind where he had the power to do so – even if it was a new tax right after the same one expired. His attitude on government increases in fees has been different, not opposing them when he saw convincing evidence that they were to cover the cost of government doing that business – even when legislative majorities were displeased with the fee increase. He has done so both through the formal instruments of his office such as signing or vetoing legislation, and through informal means such as letting out the word that he would veto something objectionable, which would be enough to stop it from advancing any further in the legislative process.

Now, SB 361 and SB 630 present potential hard cases for him. The bills, the former applying to Orleans Parish, the latter to St. Bernard Parish, would raise fees on telephone lines, both land and mobile, ostensibly to fund 911 emergency services in those parishes. They would force operators to tack on even more in fees onto their bills, expanding their roles as fee collectors for local governments, although voters in St. Bernard would have the option of defeating in a referendum their hike. Author J.-P. Morrell in offering these is following the common practice of passing through what serves as a sales tax by a local government but, by putting a private entity as an intermediary, deflecting constituent attention away from that.

With their unanimous passage in Senate committee yesterday, the bills have gathered momentum, so if Jindal wished to intervene now would be a good time to start. Yet they present a quandary. Morrell, in his arguments to pass them, admitted that there’s no real substantial increase in costs over recent years associated with the provision of 911 service (with fewer people living in Orleans to serve than a decade ago while the number of lines, given the boom in cell phone distribution, lower expenses and higher revenues would be expected, although Morrell claimed increased tourism could increase usage, capital costs needed to be covered, and there was a “murder problem” driving up costs), but did say it would allow to take less from the city, as some subsidization came from New Orleans personnel usage (the service is from a separate special district). Further, it adds new targets to the fee, broadband users, with the justification as some of them use voice-over-Internet-protocol services to make phone calls (fees on these currently cannot be charged).

In other words, it’s simply a way for New Orleans to have more money available for other purposes subsidized by more people, without any justifying commensurate increase in the cost of providing the service, in technically a fee form that acts like a sales tax that created the highest 911 fee in the country (points brought up by the testifying opposition). To make the matter more complicated, it’s a local bill and, in the case of St. Bernard, the people get a say on the matter.

So, WWJD? After all, there’s been no demonstration by the Orleans district that the amount of money is needed to the extent it would be used, or that current dollars are spent efficiently, with the evidence that it apparently would have the country’s highest rate and still might require New Orleans subsidies casting doubt that they are spent efficiently. Perhaps they are well-spent, but no evidence has been given to substantiate that. So, the preference expressed in this bill is to score more revenues first, and ask questions about the wisdom of the expenditures later. And, it acts like a sales tax but it is a fee and is local, not state. This would be enough to violate Jindal’s standard that only fees that are justifiable in covering appropriate costs do not merit opposition.

This argues that Jindal, to be consistent, would step in on the matter, at least on the question of SB 361 (he could argue that with SB 630 if people wish to increase their own local fees, he won’t prohibit them from doing so), and voice opposition. But with all that’s going on with other signature legislation of his, the local nature of this, and with the subsidization going on that suggests real need, if assuming that current dollars are being spent wisely, he might consider this too much trouble to get involved with at this time. So it will be interesting to see how SB 361 in particular fares, and what this tells us about Jindal’s preferences on these matters going forward.