On Saturday, Stephen Sabludowsky interviewed Tyler Bridges, freelancing reporter writing for The Advocate, who is covering the legislative session.
Below is a very rough summary of the interview excerpts. Please cursor to the time points (minutes and seconds) to watch the conversation segments.
In the first part of the interview, Bridges explains the Louisiana budget deficit as the money the state would need this year beginning July 1 2015 to match the money spent last year. State is $1.6B short. The reason for the shortfall is because last year, legislature used about $1B in one-time money to plug the budget. There is about 600,000 maybe 700,000 to cut and the rest would have to be made up in tax revenues.
1:46 House grappled with the budget this past week and takes up budget issues first. The House Ways and Means passed various tax increases and the full house voted on them on Thursday. They are tax increases, but lot of legislators prefer to call them tax expenditures. Of the taxes raised Thursday, only one was a direct tax, those on cigarettes, which was a 32 cent increase equal to that of Mississippi's tobacco tax.
2:56 Rest of measures they passed were to trim various tax credits. On Thursday, they raised $664 million. They were hoping to get up to $937 million so they were $273 million short. The House leadership said, if we are just going to cut spending, it will be cutting the universities and public colleges. Said we cannot make those cuts to education and healthcare systems. Recent years, businesses have been paying less in taxes with tax breaks that the legislature and governor have added to tax code in recent years. That is where the House leaders went to raise the money (those tax breaks) and so the result last week was 664 million in new taxes.
4:43 What is the legislature going to cut? There will be cuts such as cutting pay raises, state travel but should they make the real cuts, it will be to universities and healthcare.
5:52 The big issue in New Orleans is the opening of new hospital. The private company managing it needs $88M of extra money to manage the hospital. If they do not get it, it is possible they won't open it. Group of republican legislators are saying they will not vote for taxes--no matter what. On the other hand, others are concerned about more cuts to education and health. House-passed $664 million in taxes goes to senate to various committees where they can raise or lower the amount of taxes and then goes to the full Senate (and continues the process).
6:56 Jindal did not invent using one-time money but it has grown under his administration. With the state legislators being mainly anti-tax crowd and by now, they have drained all reserved accounts and so they used one-time money last year. It is like draining bank account. Many conservative republican legislators are doing something surprising which is raising taxes and most of those taxes are falling on businesses.
8:21 Steve Waguespack of LABI is not pleased. On Friday, Bridges asked governor question about Waguespack calling Thursday’s house action--possibly the largest tax increase in history in one day. Business community is protecting special interest. LABI will continue to lobby to not increase tax increases.
Demos are concerned about the roads, hospitals and are saying focusing upon them is necessary for business. Waguespack is labeling the reduction of tax credits as taxes but legislators are calling it trimming tax expenditures. The tax expenditures have grown enormously under the governor and legislature. The state has gone too far and now we need to correct that and business are saying don't
11:08 Bridges discussed Friday’s press conference with Jindal. Throughout the presser, JIndal was saying the process is not over and must look at big picture and that there were a lot of moving parts. Jindal has made it clear that if the Senate approved what House did on Thursday, he would veto the budget. The legislature will amend Thursday's action. Jindal was more nuanced than Waguespack about whether the increases were taxes. Jindal would veto the budget if it remained the same as Thursday.
13:41 Governors rules on taxes are confusing. Jindal believes the rebates of inventory tax are not taxes but reduction in spending, thus a spending reduction. Business considers the reduction of tax credits paid to businesses to repay them for the inventory tax that goes to local governments—as tax increases.
17:08 On Monday, appropriations is hoping to pass first draft of budget and they want to call in the tax increases and want to take that money and plug it into the budget. Fannin told him, the plan is to fully fund higher education, so higher education would not incur any cuts. But in doing that, that leaves hole for healthcare system. House has made political decision to direct all the money to higher ed. Money left over would be to healthcare so healthcare is on limb itself.
19:03 The healthcare situation is worse actually because the federal government has not approved funding of the privatization of the hospitals, but that funding issue is not relevant this year but will be for the next governor. Right now, the problem is the private hospitals need the money and there is a risk that they would cancel the contract with the state which would cause chaos in healthcare system. Right now, the question is whether the legislature will raise more money. Mainly the republicans but a few democrats are saying they are not going to vote for taxes, especially with this being an election year.
21:01 We have a conservative governor and legislature and they will make some cuts maybe up to $700 million or more to deal with 1.6 billion dollar deficit. Legislators are saying the hole is so big because of the prior use of one time money. The drop in oil prices has worsened the situation, but really the only way to cut would be to hitting the universities and the hospitals and other healthcare.