Heated at times, House committees hammered away at some of the special session bills.
On the second day of 2018’s special session, Louisiana’s Republican House leadership gave every indication they’re preparing to forge new shackles for themselves and the administration. They’re setting up to link favored bills in an “all our way or nothing” approach to resolving the fiscal cliff.
House Appropriations convened first, taking up bills filed by Speaker Taylor Barras, which would implement two of the demands included in his end-of-January letter to the governor. They started with changes to the state’s expenditure cap, a measurement initially established in 1995.
“Why change? It doesn’t re-set, and through the years it has grown exponentially,” Barras explained. “When the expenditure limit is a billion to two billion dollars above what you have available, it becomes irrelevant. This would make it a relevant number again. It needs to be a limitation on spending.”
Noting that his bills on the topic would also change the rules currently saying any overage must go into the Budget Stabilization Fund (a.k.a. Rainy Day Fund), Barras added, “This would give us the opportunity to decide if we want to bust the cap – and to direct the surplus.”
Commissioner of Administration Jay Dardenne expressed concerns the changes could limit calculations now allowed when the governor drafts his executive budget proposal. Barras, without hesitation, agreed it might do exactly that.
LABI and AFP (Americans for Prosperity) put in cards of support, but Speaker Pro Tem Walt Leger said he couldn’t support the concept without seeing what other bills for raising revenue were coming to the House floor, though he wouldn’t formally object to advancing the measures.
Appropriations also took testimony on the Speaker’s bill creating the “Louisiana Checkbook” fiscal transparency website. There were cards in support from the coalition of pro-business groups, including the Baton Rouge Area Chamber, as well as LABI and AFP, which have already purchased the LouisianaCheckbook.com web domain. Committee member Blake Miguez jumped on the bandwagon, urging support by saying, “This is important to the taxpayers back home who want transparency.”
But Dardenne again had words of caution for the panel, reminding them it would take three years, and tens of millions of dollars to upgrade Louisiana’s computer systems, then migrate them into a program where they all talk to each other.
“The checkbook concept is brilliant,” Dardenne said, “But let’s do it in the most cost-effective way. This bill requires us to deal with a third-party vendor, yet you have told us repeatedly to minimize contracts with third-party vendors.”
The bill advanced to the House floor, without objection. Later in the day, the full House agreed to suspending the rules, eliminating one layover day, so the Speaker’s bills could be voted on as soon as today or Thursday.
In Ways and Means, the process of taking testimony on revenue-raising bills began amicably enough, starting with a proposal by Baton Rouge Democrat Ted James – to reduce by half the state allowances for federal excess itemized deductions.
“This gets us a step in the right direction,” James said.
But as Republicans on the panel became increasingly aggressive with their questions, James’ smiling responses became more forced. Committee chair Neil Abramson then asked the author if would consider an amendment to allow allow charitable and mortgage interest to be included – even if it exceeded 50-percent of the federal amount.
“If it makes the bill better, I’m open to amendments,” James responded. “But if you’re just going to vote no anyway, then don’t waste my time.”
The bill was returned to the calendar, and Abramson explained, “We’re just hearing bills today. You may close on it when we vote later.”
They heard Ruston Republican Rob Shadoin’s bill to make the so-called “haircut” bills – reducing the allowable percentages of some corporate tax deductions – permanent. They parked it, as well.
Baton Rouge Representative Pat Smith’s bill to consolidate the three annual sales tax holidays into one weekend was next.
Kenner Republican Julie Stokes applauded the measure, reminding committee members this was a reform suggested by several of the reform task forces in recent years. But Haughton Republican Dodie Horton was having none of it.
“Why? Why do you want to repeal these holidays, which reward the hardworking taxpayers of Louisiana?” Horton asked.
“To provide for the fiscal cliff we’re facing,” Smith replied.
Ways and Means then turned to bills dealing with sales tax – specifically “cleaning” the four pennies of state sales tax that will remain once the fifth penny falls off the revenue rolls on June 30.
The tenor of the questions quickly made clear the bills authored by Lake Charles Republican Stephen Dwight were favored over those filed by Jackson’s Kenny Havard – also a Republican, but more of a centrist than Dwight. Havard became so frustrated he exclaimed at one point, “Either do something – raise taxes or just cut! We could train monkeys to come down here and vote no!”
Tension was even more palpable as Speaker Pro Tem Walt Leger presented his group of revenue-raising bills. Aware that House GOP leadership had already labeled the concepts as “non-starters”, Leger began by addressing the expected objections.
“These bills are designed to offer as many options as possible to manage the fiscal crisis,” he said, going straight into his arguments for advancing HB 9.
“This comes from the task force recommendations. It shifts the tax brackets back to Stelly, as voted on by the people, creating a more sustainable system,” Leger stated. “We are all too reliant on the sales tax. This is a way to try and balance things out.”
Horton objected, saying, “This bill is a significant hike on the middle class. We just had a tax cut from the federal government, and now we’re going to raise their taxes? I can’t support this!”
Leger reminded her that repealing parts of Stelly is what sent Louisiana into the spiral of recurring fiscal crises. And he noted that Kansas, which tried similarly cutting taxes with the promise of economic stimulus, had finally recognized the the whole concept was a failure.
Horton responded, “But North Carolina!”
Leger said, “This bill, in isolation, is not the answer to our problems. But this bill, along with other bills that have been and can be filed, are the ways for us to have a system that is more like a North Carolina, or a state that we would like to emulate.”
Leger’s bills were also held for later voting, presumably today.
Throughout the day’s hearing, Ways and Means vice chair Jim Morris kept repeating an advisory to bill authors: “Tomorrow, I will offer an amendment to all these bills that come up here – just so you know.” What did he mean by that?
Based on prior sessions with this group, they’re going to try and forge a contingency chain – linking their favored bills together with amendments that make passage of those measure an “all or nothing” proposition. For example, the sales tax pennies in Rep. Dwight’s bill won’t be cleaned unless the Speaker’s spending cap and Louisiana Checkbook bills pass first – in essence, exactly what was insisted upon in the Speaker’s letter.
It’s a maneuver that’s been tried before – most recently with Representative Barry Ivey’s tax reform bills during the 2017 regular session. And it invariable ends up killing all the bills so linked.
Cue Aretha Franklin’s song from 1967…