There was a remarkable moment in the Louisiana House of Representatives last Friday, when a Republican legislator from Baton Rouge stood at the dais and revealed something about his own party’s leadership that many have surmised to be true for the better part of the past two years.
“We don’t want a Democrat (governor) to get re-elected, and we don’t want to give him a political win by doing tax reform. That was something that was told to me (by party leadership),” Rep. Barry Ivey said. “We placed politics ahead of our constituents. We should all be ashamed.”
Republican House leaders in Louisiana, in other words, are stealing a page from the failed playbook that U.S. Sen. Mitch McConnell used against Barack Obama. Like McConnell, their number one strategy seems to be defeating the incumbent Democratic executive, even if it means sabotaging commonsense legislation in the process. President Obama was, of course, re-elected by more than 51%, a full four points more than the current president received in 2016, and despite the sustained efforts of Louisiana Republican Party leadership, the Louisiana Association of Business and Industry (LABI), and the Koch-funded Americans for Prosperity, Gov. John Bel Edwards currently enjoys approval ratings in between the high 50s and low 60s.
He’s the most popular Democratic governor in the country.
When Ivey made the stunning admission, legislators were debating HB8, a bill proposed by Speaker Pro Tempore Walt Leger (D- New Orleans) that sought to eliminate the ability of state taxpayers to deduct state taxes paid, when itemizing deductions on their state tax returns. Louisiana is one of only four states that even has such a loophole, which was enacted during the early years of the Jindal administration, a time in which there was a reservoir of federal funding pouring into the state as a result of hurricanes Katrina and Rita. Leger’s bill would have raised an additional $79 million in annual revenue, not enough to close the state’s nearly billion dollar expected budget shortfall but a big step in the right direction.
(Some Republicans argue the shortfall is closer to $690 million, because, ironically, Donald Trump’s tax reforms actually increase Louisiana’s state income tax rates, which are anticipated to bring in $302 million next year; either way, Leger’s bill was always just a part of the overall solution).
For the past two weeks, veteran political journalist Sue Lincoln has been covering the special legislative session for The Bayou Brief in a newly-launched feature we’re calling “The Capitol Brief” (see the menu above or click here to read her reporting thus far), and she will continue her daily reporting here throughout the entirety of the upcoming regular legislative session. If you haven’t paid much attention to the news coming out of the state Capitol, take some time and read Sue’s coverage; it’s really stellar.
It’s also somewhat depressing and frustrating, because, as she has chronicled, House Republican leadership has been almost gleefully attempting to sabotage any meaningful effort to resolve the state’s fiscal cliff from the very beginning.
Barry Ivey wasn’t the first or the last Republican legislator to criticize his own party and implore them to accept a compromise. Reps. Kenny Havard (R- St. Francisville), Julie Stokes (R- Kenner), Rob Shadoin (R- Ruston), and Thomas Carmody (R- Shreveport) have all, at various times in recent days, made public statements during the session critical of their own leadership. Others have expressed their exasperation behind the scenes.
When Gov. Edwards announced a special session, in the spirit of compromise he included in his call the two biggest priorities for Republican leadership: The creation of a new website tracking government spending, which was lobbied heavily by LABI and Americans for Prosperity, and a proposal to implement work requirements for Medicaid recipients. Both of these proposals, it is worth noting, would actually add to the budget, and there is no evidence that either of them were truly offered in good faith by Republicans.
In the case of the website, the so-called Louisiana Checkbook, corporate lobbyists repeatedly misrepresented the costs, ignored the fact that Louisiana’s current site is ranked as the seventh best in the entire nation, and then refused to allow the inclusion of exemptions and deductions that big businesses receive from the state, citing concerns about laws protecting the privacy of income tax returns.
But Republicans had no such concern about the privacy of tax returns of those receiving Medicaid. They championed a bill that would allow the state government to scrutinize the details of every Louisiana adult receiving Medicaid benefits, nearly 10% of the population. (There are 1.6 million Louisianians on Medicaid, approximately 455,000 of whom would be targeted by this legislation).
Well before Republican leadership in the state House took up the cause of Medicaid beneficiary fraud as a priority, Attorney General Jeff Landry made it one of his.
On April 4, 2017, Landry sent a letter to then-Secretary of Health and Human Services Tom Price, asking him to change the interpretation of a federal law and allow him to investigate, arrest, and prosecute people suspected of beneficiary fraud. Read the full letter here.
This is the first page:
The bulk of the study Landry cited is actually from seven years ago, in 2011, and it proves only that a small handful of people in a small number of states received Medicaid benefits that could have been improperly awarded, though the more likely explanation is that, in the vast majority of cases, the error was the fault of sloppy bureaucratic bookkeeping, not criminality.
But beneficiary fraud is now Landry’s cause célèbre. He’s running radio ads asking for people to report “Medicaid welfare fraud;” he’s also made it the top feature on his website:
The motives here have very little to do with protecting the best interests of the taxpayer. They are entirely, cynically, and transparently political.
Gov. Edwards’s decision to accept federal funding for Medicaid expansion, a component of the Affordable Care Act that his predecessor, Bobby Jindal, had long opposed, resulted in a huge windfall for the state: Billions more in revenue over the next several years and nearly a half a million more Louisianians with health insurance.
Lives have literally been saved as a consequence.
Republican Party leadership in Louisiana had doubled-down on a dumb position for several years, and despite the fact that all three of Edwards’s major Republican challengers also supported Medicaid expansion, their leaders continue to be determined to undermine the credibility of the program’s success, even if it means spending more taxpayer money, in the middle of a fiscal catastrophe, to scrutinize the tax returns of poor people.
Rep. Gary Carter (D- New Orleans) cut right to the chase Friday night:
The @lagop wants to audit the tax returns of everyone on Medicaid, but @realDonaldTrump won't even release his tax returns. Will small group of Republicans throw Louisiana over a fiscal cliff over this issue? #lalege #LaGov pic.twitter.com/KMXkQQCGXu
— Rep. Gary Carter Jr. (@gm_carter) March 4, 2018
At the same time, Republican leaders and partisan lobbyists and activists championed a website that tracked government spending, but not the actual spending it provides to corporations. When Rep. Ted James (D- Baton Rouge) posed the possibility of adding corporate exemptions and deductions to the new website, here’s how the Senior Vice President of LABI responded:
Change state law to allow the disclosure of tax returns? As I understand it, state law mirrors federal law to protect the privacy of taxpayers – mine, yours, our small business, and companies. Reporting exemptions in aggregate is standard nationwide. Incentives should be named.
— Camille Conaway (@CamilleConaway) February 21, 2018
I decided to chime in:
Do you suggest all of us as individuals put our tax returns online and include my childcare tax credits? Or small businesses who hire prisoners and receive a tax credit? Or companies who flooded and used a deduction for losses? Or just “corporations” with credits?
— Camille Conaway (@CamilleConaway) February 22, 2018
The cognitive dissonance- the hypocrisy- here is astounding: Republicans want the government to spend money on a new website in the name of transparency, but we can’t track the hundreds of millions the state gives away each and every year through lucrative exemptions to corporations, which is all Rep. James and others were proposing. That’d encroach on privacy laws, we’re told. At the same time, however, the same Republicans want the state to have the ability to single-out the tax returns of anyone receiving the benefit of Medicaid, and the Republican state Attorney General is begging the federal government for special permission to investigate, arrest, and prosecute anyone he suspects of fraud.
Again, Louisiana is currently facing a nearly $1 billion shortfall, and because of the way our state constitution operates, legislators and the governor only have discretion over about $3.4 billion a year in spending, 80% of which is dedicated to higher education and health care. This isn’t some great mystery; it’s not as if each and every member of the legislature doesn’t know this already. Because of the expiration of the one-penny sales tax increase enacted in 2016 as a bridge toward their promised “structural tax reform” (and which gave Louisiana the highest combined sales tax rate in the country), legislators will have to raise revenue somehow.
Instead, during much of the special session, Republican leadership pretended as if the shortfall was a consequence of a “spending problem,” while prioritizing unserious legislation and amendments that only add to state spending and fail to truly confront reality.
In addition to Landry and House leaders, Louisiana’s junior U.S. Senator, John Kennedy, who appears to be gearing up for a run for governor only two years after winning a six-year term in Washington, D.C., is also selling Hadacol to voters. On the same day state Rep. Ivey exposed the party’s playbook, Kennedy issued a bizarre statement that sought to blame Gov. Edwards for spending too much, citing as his only example the $400,000 spent on a sculpture at the new state hospital in New Orleans.
The sculpture was installed recently, but it was commissioned and paid for in 2014, during the Jindal administration. Since its installation, Louisiana has changed its laws on how it spends capital money on public art, but even if those laws had never been changed, they would have zero impact on the impending fiscal cliff. The other incredible irony is that Kennedy, in voting for “Congress’ federal tax reform,” effectively voted to increase income taxes in Louisiana; state law mandates that when the federal government lowers tax rates, Louisiana automatically raises its rates.
State Rep. Alan Seabaugh (R- Shreveport) touted the expected increase in revenue as a reason to delay any decision on resolving the fiscal cliff, calling the governor a “liar” from the floor of the state House on Friday for not accounting for the tax increase Sen. Kennedy supported in the administration’s projections, a claim disputed by the governor’s office and House Democrats.
Yesterday, as Sue Lincoln argues in her most recent report, House Republican leaders, particularly Speaker Taylor Barras (R- New Iberia), fully revealed their “con game.” They’d never actually intended on saving the state from the impending fiscal cliff, and unless things change rapidly, it seems certain they won’t rip up their playbook.
On Friday, Rep. Leger’s proposed HB8, the bill closing the loophole on claiming deductions, failed narrowly, 50-51; five Democrats opposed the legislation after an amendment Leger attached to the bill, seeking to “de-couple” language related to Medicaid work requirements, had previously failed to pass. Curiously, two Republican “no votes,” Rep. Cameron Henry (R- Kenner) and Rep. Kevin Pearson (R- Slidell), were not even present for the vote. Immediately following the bill’s defeat, the overwhelming majority of members supported a motion that would allow them to reconsider the proposal.
For the next three days, negotiations were privately conducted between members of both caucuses and the governor’s office, and an agreement in principle seemed to be within grasp: In exchange for eliminating the language about Medicaid work requirements, Democrats would join a group of moderate Republicans in order to pass HB8 and, as long as the similar language was removed from Rep. Stephen Dwight’s (R- Lake Charles) HB23 (which sought to renew a quarter-penny of sales tax), they would all support the Republican bill as well. But they would only do so if Speaker Barras agreed to consider HB8 before HB23.
Democrats and several Republican legislators believed they had successfully reached a compromise; the Medicaid work requirement legislation was already on its way to the state Senate, after all, so there was no real reason for the language to be in any other bill.
But Barras, in an act that can only be described as “bad faith,” reneged on the compromise and attempted to shove through HB23 before allowing members to consider HB8 again. He wanted to force a vote on a sales tax that would disproportionately affect the poor before allowing a vote on eliminating a deduction enjoyed almost exclusively by the wealthy. Rep. Dwight was severely misled by Barras and other party leaders; he insisted, despite others on the House floor directly informing him otherwise, that he had the requisite votes needed for passage. Shortly after his bill died by an overwhelming margin, Dwight revealed that he’d been completely left out of the negotiations. He didn’t know, until it was too late (he had accepted a motion to allow amendments at the last minute, only to have that struck down on procedural grounds), that his own party’s leaders were setting him up to lose in primetime.
There’s really no other way around it: Republican leadership wants the state to fail.
They’re less interested in doing the people’s business than they are in undermining the Democratic governor.
Louisiana has more than enough Republicans in the legislature who could work with Gov. Edwards and their Democratic colleagues to ensure the state doesn’t fall off the fiscal cliff, all while maintaining their party’s control over the speakership.
But as long as the GOP is led by people who think they were elected to be partisan politicians and not principled policymakers, Louisiana will continue to be held hostage by ignorant, ineffective ideologues.