Governor Bobby Jindal who has had a good legislative session but for an embarrassing vote on the stimulus unemployment legislation that occurred Monday on the House floor, suffered a setback Thursday as a House Committee voted to “approve a funding mechanism” due to the loss the Louisiana Budget was having upon higher education.
A press release by Senate President Joel Chaisson explains the setback:
A bi-partisan coalition of state lawmakers, led by Senate President Joel Chaisson, Senate President Pro-Tempore Sharon Weston-Broome, Senate Finance Committee Chairman Mike Michot and Senate Finance Committee Vice-Chair Lydia Jackson, moved today to restore higher education funding. The coalition won the Senate Revenue and Fiscal Affairs Committee's approval of Senate Bill 335 by Sen. Jackson. The measure provides a funding mechanism to restore $118 million in higher education funding, which could reduce the proposed $219 million budget cut in the executive budget to a much more manageable $101 million reduction.
Senate Bill 335 would simply retain the currently allowed excess federal itemized deduction on a taxpayer's individual income tax return at 65% for a period of three years. The bill does NOT impose any new taxes and continues to allow any taxpayer with excess itemized deductions to claim the same percentage in 2009, 2010 and 2011 as they can currently claim this year under existing law. In 2012, taxpayers would be able to claim 100% of the deduction. The bill does NOT in any way alter or reduce the state income tax relief provided to Louisiana citizens last year under the Shaw bill that repealed portions of the Stelly Plan.
"In lean budget years, cuts need to be made and higher education need to become more efficient and to bear a meaningful portion of cuts. However the amount of the cut proposed for higher education is simply unsustainable and will result in layoffs of tenured faculty, reductions in students services and the start of a downward spiral in the quality of our higher education institutions which could take decades to reverse. We can't afford to let that happen," Senate President Chaisson said.
Senator Jackson, Senator Michot and Senate President Pro-Tempore Broome agree.
"Today we are faced with budget reductions that will generational scars on the face of higher education in Louisiana. Senate Bill 335 attempts toprovide a little salve to the wounds," Senate Finance Committee Vice-Chair Lydia Jackson said.
"For the state's immediate and long-term future, it is clear that we cannot allow budget cuts that will do irreparable harm to our colleges and universities, institutions that are the engine that powers the creation of jobs and businesses in Louisiana," Senate Finance Committee Chairman Mike Michot said.
"Providing our citizens access to quality higher education services is key to building better neighborhoods, better communities and a better Louisiana," Senate President Pro-Tempore Sharon Weston-Broome said. "We cannot permit our current state budget crisis to eat away at the foundation of a stronger Louisiana."
Board of Regents Chairman Artis Terrell as well as Regents William Raspberry and Charlotte Bollinger indicated their support of Senate Bill 335 as the Revenue and Fiscal Affairs Committee considered the measure. The bill next moves to the full Senate for consideration.
Chaisson told Bayoubuzz that four Republicans in the committee including Republican Mike Michot supported the committee’s action.
However, should the legislation pass the full Senate and the House, it appears that the action might be short-lived.
In an email response through his Director of Communications, Melissa Sellers, Governor Bobby Jindal stated “We have said all along that we would veto any legislation that delays tax relief for Louisianians. We share the legislature’s concerns that reductions too often fall to higher education and health care during lean budget years and we will continue to work with them to find ways to protect these critical areas.”
Should Governor Jindal veto the legislation, the Legislature would then be forced to override the veto, should it attempt to do so.
David; though it is a fiscally responsible suggestion on your part to recommend repeal of the Stelly Plan, since the balance sheet will add up, I submit that this is the wrong approach. That course of action will remove the one act that has been passed to implement real tax reform and ecourage business growth in Louisiana, which is so badly needed. Many taxpayers who itemize their deductions do so while filing IRS Schedule SE (Self-Employment). We should recognize that these are frequently skilled workers and active entrepreneurs who do so much to strengthen our state's economy and provide jobs. A far better approach would be to lower the homestead exemption by $25,000 and then reduce state remittances to individual parishes by an amount equal to the increase in their revenues that results from a lower exemption. In that manner the balance sheet will add up, skilled workers and entrepreneurs will be encouraged and rewarded for the benefits they bestow upon the state, and corporations outside of Louisiana will be encouraged come here by their recognition that the tax burden has been shifted away from an onerous dependence upon business. We would encourage skilled workers to stay, entrepreneurs to create jobs, and out-of-state businesses to come and provide jobs. Repealing the Stelly plan penalizes skilled workers and entrepreneurs and sends a very wrong signal to businesses considering relocating to our state. We need not face a choice between funding higher education and encouraging job growth, which is the reality of any consideration designed to repeal the Stelly plan. Written by Jacob Sulzbach, Lafayette, La.
on 5/23/2009
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Postponing the repeal of the Stelly Plan during this budget crisis is the only rational thing to do. Written by David Quidd
on 5/22/2009
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I am unhappy with the budget cuts for higher education and I am pleased to see that my State Senator, Mike Michot, is seeking to restore at least some of them. But I am not pleased with the form of this debate as it now stands, because there is no "balance sheet" offered to compensate for the restoration of some spending cuts. If the legislature wants to restore funding to higher education, then they should do the necessary work of finding reductions in spending and/or costs elsewhere -- and there are plenty to be had in my opinion -- to pay for them. And I urge that they do exactly that to avoid penalizing higher education too severely. Debates over fiscal policy that center upon what kind of spending we like most invariably lead to legislative avoidance of the hard choices that need to be made to maintain fiscal discipline. Okay; so we all want to support higher education. Let's put up our list of spending cuts so we can pay for them. May I suggest the following: 1) Face the reality that the $8 billion annual personnel obligation for the state (4/5 of the budget, from NOLA.com) is just WAY too high and then sit down and start working on who gets fired. Doesn't sound nice does it? But we simply MUST do it because sending checks in the mail to everyone prevents us from funding higher education. My suggestion is look to the state health care system and administrative costs in education everywhere first. 2) Consolidate the state's information (data) management under one rubric to avoid the duplication of information services across agencies which requires additional -- and very highly paid -- employees, as well as higher fixed and operating costs. 3) Take the recommendation of closing some of the smaller four-year colleges and convert them into community colleges. It's a terrible idea everywhere it's suggested, but the costs are just too high to continue as we have been, since we can still provide access to four-year colleges for qualified students within the remaining institutions. And if all of the above do not produce enough cuts, then you go to the list of targeted spending bills and work your way down. That's the way you discuss cutting or restoring items to the budget. You use a balance sheet; put some in here, take away some there. Simply howling about which ox gets gored is irresponsible. You want the spending restored to higher education, then put up your list of cuts. Written by Jacob Sulzbach, Lafayette, La.
on 5/22/2009
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how quickly they came with their response to that common-sense proposal to all of the hem and hawing over the legislative pay raisee. Written by Let's compare
on 5/22/2009
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Higher Education? We don't need that! We need chicken processing plants. Don't you know that chicken processing plants are our future?
Written by CWM
on 5/22/2009
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