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Jindal veto explanation consistent with constitution's logic
We all need a little help from time to time, some more than and more often than others, and it’s the Baton Rouge Advocate in need this time. Much as a kindergartner needs assistance in understanding 2+2=4, the editorialists at the paper require aid to comprehend why Gov. Bobby Jindal vetoed a series of laws that could have continued the tax on automobile rentals across the state. Let’s see what we can do to remove them from their confusion.
The expiring law, first enacted in 1990 but extended several times since, allowed levying of a three percent tax on short-term rentals that were not replacement vehicles subject to a repair of another, of which one-half percent would be remitted back to the parish. Four bills passed to try to keep the local portion on the books, three identifying certain parishes and the other general to the state.
The Advocate got stumped because Jindal wrote he vetoed them because he pledged not to “raise taxes,” while it argued that this was a tax “renewal” at the same local or aggregate amount, stating “If it’s a renewal, it’s not raising a tax, by definition. It’s keeping it where it exists.” Further, it argued that, as the mechanism in all cases was to provide a local option election to impose the tax, this gave the tax added validity as the people would choose whether to put it upon themselves. Then, somewhat contradictorily, it also tried to provide validation of it by saying local citizens would pay next to none of it anyway. Finally, it defines Jindal’s actions as hypocritical because he has permitted revenue-raising actions, such as on college tuition and other agency fees, to go forward based upon fee-for-service models, but not on what it calls tax “renewals.”
Such objections tell us two things about the Advocate’s editorialists: they don’t think very logically, and they are ignorant of the state’s Constitution. Correction of this first point in the previous sentence disposes easily of the last objection of the previous paragraph: a fee, which bears relationship to the form and cost of a service performed, is different from a tax, which is an amount unrelated both in form to and cost of service of an activity.
For example, the state subsidizes considerably the actual cost of a college education, justified by the state’s interest in having a well-educated populace. But by far the biggest beneficiaries of this arrangement are the actual recipients of the subsidization, for obvious reasons. Therefore, making them pay more than they do currently for the actual costs of this benefit not only is entirely appropriate, but also moral in the sense that there needs to be proportionality in the benefit to the state should not exceed what it pays. Regardless, it is not a tax increase, and while the Advocate objects that “he raises state revenue by indirection,” in fact it tries to corrupt the argument about this issue through misdirection by trying to assert this equates Jindal’s actions to hypocrisy.
It also founders logically in that some of the bills praised would “renew” only at a half percent. So how can “renewal” of an aggregate three percent tax actually drop it to an aggregate on one-half percent? Only if we conceptually treat the tax that would have taken effect after Jul. 1 as a new tax, meaning it’s not a “renewal” but an old tax of three percent dropping off to be replaced by a new tax at one-half percent, does this describe logically this situation.
And we would not be alone in accepting this as the proper conceptualization, because that’s the same one as in the Louisiana Constitution. Where the Advocate truly misses the point is its failure to understand the rationale behind the convoluted nature of the bills – the local option – where in fact it tries to make a virtue of this vice. Why didn’t lawmakers simply “renew” the tax as it was; why introduce this whole idea of local option for the half-percent in some of the bills, or to give them the entire three percent as in one? Was it because of generosity of legislators, who thought they ought to give the people say in direct elections if they were going to have this kind of tax made permanent?
Actually not, for the real reason is much crasser than that. It’s because any other arrangement would have violated Art. III Sec. 2 of the Constitution, where paragraph (A)(3)(b) states “No measure levying or authorizing a new tax by the state or by any statewide political subdivision whose boundaries are coterminous with the state; increasing an existing tax by the state or by any statewide political subdivision whose boundaries are coterminous with the state; or legislating with regard to tax exemptions, exclusions, deductions or credits shall be introduced or enacted during a regular session held in an even-numbered year.”
Smarter readers than the Advocate editorialists will note this passage states nothing about a tax “renewal.” That’s because the jurisprudence of the Louisiana Constitution defines that once a temporary tax rolls of the books, any reimposition of it makes it a new tax. Thus, in order for this kind of legislation to be constitutional, its authors had to find a way to make the bills not about state or local governments imposing a new tax, but about giving local electorates the chance to impose it upon themselves. In other words, it was a way to try to dodge the Constitution.
Regardless, the legislation authorizes local governments to call for a new tax using the same conceptualization present in the Constitution. Jindal said he was against new taxes. Unless you come up short in your ability to reason and/or in your knowledge of the Louisiana Constitution – maladies apparently suffered by the Advocate editorialists – there is nothing inconsistent or hypocritical in Jindal’s actions. He stopped an attempt that would have allowed for new taxes on state residents.
Posted by Jeff Sadow at 10:35