Search This Blog


Budget tactics likely to make LA's people winners

Only one winner for sure will emerge when all is settled with Louisiana’s 2009-10 operating budget – the people of the state.

Contention has thickened the air for weeks regarding the document due to fundamental disagreements between the House and the Senate over the size of government. A majority of the former has expressed a desire for next to no new taxes and fees, with any additional money at all coming from underutilized existing funding or a somewhat-uncertain amount from an income tax amnesty to dredge up additional funds. The Senate has refined its appetite for additional revenue by repealing an already-implemented tax break and wanting to dip into the Budget Stabilization Fund, a move which in essence would not allow any money to be drained from it next year when fiscal conditions are predicted to be even worse. It largely consents to the House strategies for finding other monies but questions whether the amounts usable in the operating budget can be realized.

By the Constitution, the governor lays put priorities but the House has the first shot in its origination of fiscal matters. It sent a budget to the Senate reflecting its priorities above. There, the Senate tried to buck the House by rescinding the tax reduction (even as a majority of representatives pledged on paper not to go along with that), tapping the Fund, and adding back in money for areas disproportionately cut given the constitutional and legal structure of the state budgetary process, health care and higher education, made contingent on the bill and resolution passing that would allow these things. The point was to push the House into a conference committee where it could get some of these things – chiefly some kind of reneging on the tax cut, since House Speaker Jim Tucker had ruled the enabling legislation for it unconstitutional and, without any mobilization of House members to overrule him, thereby stopping it. This way, Senate Pres. Joel Chaisson could get the House to amend that bill into the conference report.

But Tucker foiled Chaisson by having the House approve the entire thing, not giving the Senate any opportunity to use the threat of non-passage of the budget to try to extract concessions. This way, if an expeditious normal path of legislative progression occurred, Gov. Bobby Jindal would have gotten the bill on Jun. 12, starting his 10-day clock on veto decisions, plus two days to deliver his veto message – meaning the chambers would have a day in hand to override any vetoes before the Jun. 25 constitutionally-mandated adjournment. The House wanted this flexibility to be able to thwart any revenue-raising measures it didn’t like, yet to be able to overturn any gubernatorial vetoes struck on individual line items that spent money for non-state entities, which run into the tens of millions of dollars, in the operating budget.

(This move also effectively ended the life of HB 889 by state Rep. Karen Peterson that would have increased taxes on tobacco. Any money it raises now has no place to go as it sets up a funding mechanism but does not trigger appropriations. Tucker and likely a majority in the House are against it as a new tax.)

The Senate would have liked to have had the same ability to ensure project survival, but to strengthen its hand for the other measures one of its provisions tied the projects to its contingent revenue enhancements being enacted. The House could do nothing about that in order to avoid the conference committee, so its hope was that Jindal would use a line-item veto on the revenue-raising contingency language, untying the projects. Then Jindal still could cast individual vetoes on them and get them reviewed by both chambers.

However, it was Chaisson’s turn to trump Tucker when, instead of a customary layover of at most a day in the presiding officer’s formal singing of a bill passed in his chamber, he decided to sit on it for the full three allowed. This pushed the deadline for a veto message reception past the end of the session, meaning now that a veto session would have to happen for any overrides to occur. They occur automatically after a session unless called off by the members of chamber through a majority vote; every single one has been since the institution of the 1974 Constitution.

This makes the Senate the biggest loser in the deal. It has to hope that the House is scared enough of losing projects to line item vetoes that it will pass the bill and resolution dumping additional money into the budget, then dare Jindal to veto them and thereby force him to accept whatever public backlash there might be to big cuts in spending in higher education and health care. That seems unlikely not only because of past House opposition to the measures but also because health care expenditures disproportionately go to a small segment of the population and higher education never has been held in high regard by a majority of population (and whose credibility is declining as it seems unwilling to make changes to itself). Jindal can say no new revenues will get through him, and the House then accepts nothing it does can prevent the exercise of Jindal’s veto pen.

The risk to Jindal therefore is minimal. As long as he takes care that enough of his line item vetoes of projects do not alienate enough House members to make them actually want to go for a critical mass of overrides (recall that these require two-thirds votes for success), a veto session again will be canceled. More hits will be taken than House members supporting Jindal would like, but that is the price they pay for getting mostly their preferences in the final budget – with Jindal’s complicity – with Senate largely cut out.

Thus, Chaisson’s move was a big gamble that likely will end up Pyrrhic in nature. It will be much more open season on Senate projects, and few of their differing preferences will be in the final spending document. The House will suffer some drawbacks on its projects, and, since the Senate pushed the issue, Jindal will endure some minor withdrawals of political capital for his excising.

Yet the people of Louisiana come out way on top. They get a budget that promotes smaller, more efficient government that does not abscond with more of their money and keeps the promises made by elected officials. If Jindal uses his veto pen enough, what results will be a good first step to fiscal reordering so desperately needed in the state as even stormier budget clouds gather for the future.

No comments: