The Mess Jindal Has Made Of Louisiana’s Budget Is Going To Destroy His Political Career

My column for the American Spectator for this week is out, and it’s about how Bobby Jindal’s problems back home are making a joke out of his presidential bid. At the moment Jindal is barely in the top 10 among the GOP field for 2016, but pundits always look upon him fondly as an also-ran with growth potential.

The problem is, he can’t survive much scrutiny of his record back home – because in his last year as governor Jindal’s running into major trouble with just about everybody who used to be a political ally. And the fulcrum of Jindal’s problems is the budget, and his proposal to solve it on the backs of the state’s business community…

But Jindal’s problem is his present; on Monday an independent poll found him underwater with Louisiana voters to the tune of just 27 percent approval (63 percent disapprove). And the problems he’s brought upon himself in 2015 make it impossible to mount a presidential run in 2016. He’s going to destroy that future if he doesn’t change course.

The primary danger confronting Jindal is Louisiana’s looming $1.6 billion budget deficit, a dragon that the state’s constitution requires be slain during the 90-day legislative session that begins April 13. The deficit comes partly from a slump in oil prices causing a steep drop in the state’s royalties and severance tax revenue, but Jindal has been patching budget holes for years by raiding the various dedicated funds to create a balanced budget out of whole cloth. Those funds having been largely drained, the $1.6 billion is a real deficit and the piper is demanding his payment.

Jindal’s administration released a budget proposal that actually leaves that budget $400 million short of balance Feb. 27, relying on a mishmash of cuts to the state payroll (primarily leaving unfilled positions vacant), staving off cuts to higher education with student fee increases, using nonrecurring revenue to plug some of the budget hole and other efforts at moving cash around to show a balanced budget. But the largest chunk of Jindal’s efforts to close the budget hole is a $526 million plan to eliminate “tax spending” in the budget; or, put another way, making a number of Louisiana’s business refundable tax credits non-refundable.

Some $377 million of the $526 million in “tax spending” Jindal seeks to eliminate is a refundable tax credit against Louisiana’s ad valorem tax on movable property, otherwise known as the inventory tax. On the surface, eliminating a tax credit that pays business $377 million per year above and beyond its state tax liability seems like a conservative effort at eliminating corporate welfare, and in fact Jindal has been praised by Americans for Tax Reform for seeking to make the tax credit nonrefundable.

But in reality, Jindal is proposing a tax increase. And in doing so, he’s about to demolish his relationship with the business community — perhaps the last bloc of political support he has left after seven years of inconsistent and at times indifferent governance.

The piece goes into the dynamics of the inventory tax and how the state’s convoluted and fouled-up tax system badly needed to be reformed while Jindal had the political resources to make it happen, but now doesn’t even seem to have the will. Also included is the fact Jindal is now at odds with his former chief of staff Stephen Waguespack, the current LABI president, over the inventory tax credit situation. It’s really amazing how that has come to pass; Waguespack is actually endorsing Jindal’s idea to roll back that inventory tax credit and save the state money but he wants to eliminate the tax altogether, save Louisiana more money, simplify the tax code and bring some more fiscal discipline to local governments who badly need it. Jindal isn’t on board with that to date, which makes the status of his budget complete chaos.

Jindal isn’t passing anything unless he gets help from LABI, ABC and the other business groups. He doesn’t control the legislature anymore, and he has to cobble together coalitions of support. The business groups are best-poised to make majorities in the legislature; if they oppose that inventory tax credit reform it’s hard to see how it could pass.

And then what? Jindal’s going to veto the budget?

I’ve had conversations with a couple of prominent state legislators in the past week, and the level of animus these people have for the governor is shocking. They absolutely seem to despise Jindal, and they want to embarrass him in this session. They’ve had seven years of limited or no communication with him, they’ve been called lots of names like RINO’s (and in some cases, accurately so) for disagreeing with him on budgetary issues and they feel like they’re being asked to walk the plank on the budget so as to get him through one last legislative session papering over the state’s fiscal problems.

Look the legislature might even be a bigger problem than Jindal is. It’s the legislature which keeps passing these idiotic constitutional amendments through to the voters which dedicate funding to pet projects that have little or no claim to priority, and the voters are poorly prepared to handle them.

When one of these dumb amendments hits the ballot, it’s presented to the voters as, for example, “Don’t you want to protect the coral reefs from coastal erosion?” when in fact the real question is “Do you think protecting coral reefs is more important than LSU?”

Jindal probably should have made that case, but he’s never weighed in on any of the amendments that make budgeting more difficult every year. Instead he just swept funds out of the dedicated accounts those amendments created, which allowed him to kick the deficit can down the road every year.

Until this year, of course. Now he’s out of time. And the legislators are blaming him because they’re out of time as well, and while Jindal can go off and make speeches in Iowa and South Carolina in pursuit of getting that 2016 campaign off the ground, many of them have to run for re-election after infuriating either the higher ed people, the business community, the local sheriffs and assessors or perhaps all of them by balancing the budget.

That’s a political mess the likes of which we haven’t seen in this state for a while. And as John Binder noted yesterday, that independent poll by that outfit out of Mississippi yesterday shows that all of a sudden the voters, at least in theory, aren’t all that wedded to Republicans anymore. Jindal is now damaging the party’s brand in the state.

Nobody is going to eat a bullet for Bobby Jindal in this state. You can bank on that. They’ll happily throw him under the bus to save their own political careers.

Which means that when Jindal’s longshot presidential bid is over, and if he isn’t able to parlay his current campaigning into a cabinet job in, say, a Scott Walker administration, where does he go politically? He’s going to be completely irrelevant in Louisiana – in all likelihood his successor is going to be a Republican and yet he’s still going to be repudiated in large measure, and with a 27 percent approval rating it’s not like he’s going to be able to run for anything statewide anytime soon.

Jindal needs a big win at this session. He needs to be able to claim some positive structural change to the state’s tax code, governing structure or both that restores his reputation as a strong policy operator. If not, he’ll leave office as an interesting dichotomy – lots of people believing he might be the best governor in Louisiana in modern times and even more people believing he’s a failure.

Both are probably true, which doesn’t say great things about how this state governs itself.



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