Louisiana lawmakers from both parties are criticizing Gov. Bobby Jindal’s deficit reduction plan, with some saying it reflects his presidential aspirations more than true state priorities.
“State legislators are weeks away from settling on a solution to Louisiana’s huge budget deficit,” The New Orleans Advocate reports, but “one thing is clear: They don’t expect much help from Gov. Bobby Jindal in solving the problem.”
In an address to legislators Monday, Jindal outlined his plan for addressing the state’s estimated $1.6 billion budget deficit, which he first proposed in February. Jindal said he would not accept any net tax increases, but otherwise gave few explicit instructions to the General Assembly, which will soon begin crafting an official budget that is certain to differ from the governor’s as legislators pursue their own priorities. (RELATED: Jindal to Attempt Massive Tax Credit Overhaul in Final Months)
Jindal also touted several substantive proposals, including a plan to convert refundable corporate tax credits into non-refundable credits, which he claims would boost state revenues by $526 million, eliminating roughly one-third of the projected deficit. Jindal describes his tax credit reforms as a spending reduction rather than a tax increase, and the influential anti-tax group American for Tax Reform supports that characterization.
Republican State Rep. Jay Morris, however, asserted in an email to supporters that, “the ATR’s way of determining these things can be illogical, inconsistent, and downright misleading to the public … or in the opinion of some … crazy,” according to Newsmax.
Louisiana Association of Business and Industry President Stephen Waguespack, who previously served on Jindal’s staff, likewise told Newsmax that “if you remove the rebate, that is a tax increase.” (RELATED: Jindal Proposes Elimination of Income and Corporate Taxes in Louisiana)
Jindal anticipated such arguments in his speech, countering that, “If companies are getting checks from the taxpayer as opposed to paying taxes, then that is government spending that needs to be examined and reduced.”
Yet some Republicans complain that the governor’s corporate welfare proposal is too vague. Film tax credits, for instance, are not among the programs targeted by Jindal, even though other states have begun to wind down similar programs after finding that they cost more money than they generate.
“Here’s the part that is frustrating to members,” Republican State Rep. Cameron Henry told the Advocate: “We have to narrow our options down to what the governor perceives to be corporate welfare, but we’re not sure how he defines corporate welfare.”
Senate President John Alario, also a Republican, said Jindal’s outline could make balancing the budget more difficult than it was during the mid-1980’s, when the state ran so short of money that officials feared they wouldn’t be able to pay employees.
“The governor has strong feelings about raising taxes without [spending] offsets,” Alario explained, saying, “That makes the parameters tougher and the magnitude larger.” (RELATED: Gov. Bobby Jindal Considering Elimination of Taxes on Oil and Gas Extraction)
State Rep. John Bel Edwards, who has already received the Democratic nomination for governor, told the The New Orleans Times-Picayune that the state has been “putting a Band-Aid on the problem for seven straight years,” adding, “We have a structural problem; we need a structural solution.”
Edwards put some of the blame on Americans for Tax Reform, noting that Jindal has signed the group’s famous pledge not to raise taxes, and “questioned if his personal political ambitions have interfered with his oath of office to lead Louisiana,” the article says.
Republican Rep. Bryan Adams, who is sponsoring a bill containing Jindal’s tax credit proposal, told the Advocate he is unsure when it will be considered by the Ways and Means Committee, which has first jurisdiction over the tax bills. Other legislators noted that they would not be able to consider specific versions of the budget until they know how much revenue Ways and Means will approve.
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