In the battle to reform the state budgeting process, the legislative “fiscal hawks” scored a victory Monday, as four of their reform bills cleared the first hurdle and passed House Appropriations committee. Two of the bills would change the way the Revenue Estimating Committee (of which Louisiana’s Governor is usually able to exert his influence on three of the four members) recognizes expected revenues. Another bill would actually cause the state operating budget to be split into two separate bills, one for discretionary spending and the other for non-discretionary, during times when cuts to Higher Education or state-funded healthcare are proposed.
The “fiscal hawks,” led by Republican House members Brett Geymann, John Schroeder, Cameron Henry and also Acadiana legislator Simone Champagne, have recently found some Democrat allies to help support some of their budget reform proposals. This is significant, as during the budget battle last year, the Jindal Administration relied HEAVILY on support from House Democrats to pass their budget. In fact, more Democrats voted for last year’s final budget in the House than Republicans.
However, the Legislative Session is early. The real test of who will stand and continue to support some of these budget reforms will be in the later days of the session, as the Administration uses Capital Outlay (HB 2) monies for local projects to buy the votes of not-so-strong legislators.
Nevertheless, the “fiscal hawks” appear to have the upper hand, despite the Jindal Administration doing its best last session and in recent months leading up to this year’s session to try and discredit their efforts. Many amongst the budget reform group were against the Administration’s rush to eliminate the state income tax this session, preferring to first establish some changes in an attempt to better stabilize the revenue estimating and budget process. The argument from many of the “hawks” hasn’t been that we can’t cut the budget, but rather, we should better prioritize state spending AND be more up-front with the needed cuts from the beginning, rather than cutting mid-year, which then forces departments to spread the reductions over a 6 month period rather than 12 months.
This does not mean the “fiscal hawks” as a group are opposed to eliminating or phasing out the state income and corporate taxes. They are not opposed to tax reform. Unfortunately, their desire to first try and stabilize the budget before changing the way revenues are collected by the state has resulted in some within the power structure of the Louisiana Republican Party to label these legislators as fake conservatives, accusing them of being against tax reform and being purely anti-Jindal. Nevermind that several of these same legislators helped lead the charge to pass Jindal’s education overhaul bills last session. One has to wonder if rhetoric is being driven by 4th Floor of the Capitol.
If the Jindal Administration is serious about tax reform and eventually eliminating the state income tax, then the Governor should be interested in working with the leadership of the “fiscal hawk” group. As of now, the Administration has expressed to the group they have no intention of supporting any of their budget reform bills. However, from the perspective of a taxpaying voter, the sales pitch of eliminating state income taxes might be easier if the Governor would agree to at least some of the budget reform package and changes in the revenue estimating process.
Once the voting public sees that the budget process is more stable, then those large negatives in the recent poll on the Jindal tax plan might move more into the positive column. Probably the two largest factors in this year’s death of income tax elimination was the inability of the Jindal Administration to effectively sell the plan, especially with lack of solid numbers, and concern of the voters with the state’s current budget problems.
Governor Jindal may not want to side with the “fiscal hawks”, as several of them have been a thorn in the Administration’s side the past two sessions and have even caused some national media to look at whether the “conservative reform” Governor really is such in the fiscal category. However, working with the group now and helping foster some positive changes in the budget process this year could lend itself to much better reception from many of the same Republicans to help overhaul the state tax code in coming years to one that is friendlier to Louisiana income earners and businesses.
Nick Bouterie is a professional landman and currently serves as an Alderman for the Town of Iota in Acadia Parish.