In what could be described as an exercise in star-crossed politics, the left-leaning Louisiana Budget Project and the right-leaning Americans For Prosperity officially joined forces Monday to oppose the creation of a rural jobs tax credit.
Special interests and lawmakers alike have become more protective in recent years about the use of taxpayer money for such incentives, with Louisiana’s government struggling through one budget shortfall after another.
The rural jobs tax credit inside HB 641 by Rep. Jack McFarland, R-Jonesboro, has already cleared the committee process in the lower chamber and was expected to be brought to a floor vote this week.
The legislation allows the Revenue Department to award tax credits, out of the proposed $90 million program, that can be claimed against future premium tax liabilities by the participating investors, lenders and insurance companies.
Those entities would then invest in growth funds that are supposed to create rural jobs in small businesses with 50 or fewer employees, in addition to other benchmarks.
McFarland argued during the bill’s initial hearing that rural banks have scaled back on making loans in recent years due to federal regulations, which in turn has cut rural companies off from access to capital.
Agriculture Commissioner Mike Strain also supports the proposed program, which otherwise fell under fire this week by the Louisiana Budget Project, an advocacy group that focuses on government funding, and Americans For Prosperity, a national conservative outfit with a chapter in Louisiana.
“We should be looking to end many of these tax credit programs and instead focus on comprehensive tax reform,” said AFP state director John Kay.
Based on an analysis from the Legislative Fiscal Office, the total potential revenue loss to the state could be $30 million per fiscal year beginning in 2023.
Special session timing unclear
The possibility of a June special session still weighs heavily on the minds of those working in the Governor’s Office — it would, after all, be the fourth special session called by Gov. John Bel Edwards since his swearing in ceremony in January 2016.
But the only way that happens is if lawmakers fail to produce a budget in the regular session that adjourns on June 8. The House and Senate are currently negotiating the budget bill, for which the bodies have drastically different visions.
The Legislature failing to pass a balanced budget would not be unprecedented, but is a rare occurrence. If it does happen next month, lawmakers would have to begin their work again immediately.
What’s more likely, according to a spokesperson for the governor, is a special session being called at a later date to address a $1.3 billion hole slated for next year due to the expiration of temporary taxes.
Edwards as well as legislative leaders are doubtful that enough new revenue can be created in the regular session that ends in just a few weeks.
The House, in particular, has failed to come to an agreement on several major tax policies this session.
That said, a fourth special session for this term will probably still be required — eventually — to tackle the state’s temporary taxes that fall off the books on July 1, 2018.
Whether that means a special session is on tap for this fall, which appears to be favored by legislative leaders, or for next year, when the so-called fiscal cliff will be much closer, now becomes the new focus of speculation around the Capitol.
Unless, of course, lawmakers are unable to agree to a budget in the regular session, which would in turn require an immediate special session convening in mid-June.White gets some backup
A six-figure media buy that features a reference to state Education Superintendent John White and policy milestones during his tenure launched earlier this week in the Baton Rouge, New Orleans and Shreveport markets.
Television, radio and digital are all part of the campaign, which is being bankrolled by Education Reform Now, a 501(c)(3) affiliate of the state chapter of Democrats for Education Reform.
The outreach effort comes one month after LaPolitics first reported an effort underway in the state Senate and elsewhere to have White either face a contract review before the Board of Elementary and Secondary Education or a ratification vote before a Senate committee.
White, who was hired by BESE during the administration of former Gov. Bobby Jindal, is now working on a month-to-month basis during the current term.
Opponents believe bringing a longterm contract before BESE or a second ratification vote before the Senate offer an opportunity to oust White.
No extra money for state
Lawmakers who were hoping for an uptick in tax collections, just in time for the final stretch of the regular session, were sorely disappointed earlier this month after the Revenue Estimating Conference met.
The REC panel, which is charged with determining how much money the state has to spend, downgraded the revenue estimate for the next fiscal year by roughly $27 million.
Lawmakers consider that to be a modest decrease for a $29 billion budget.
Nonetheless, it’s unknown if lawmakers will have to address that loss as budget negotiations continue. There was no change in the forecast for the current fiscal year that ends on June 30, although state officials admitted that a dip might eventually surface there as well.
Political History: Four Fast Facts on the Legislature
There were two years in Louisiana’s long history where the Legislature was unable, although not unwilling, to convene a policymaking session and an extended period of time where there was actually more than one House and Senate meeting, according to a history compiled by the Legislative Research Library.
The terms of lawmakers have changed over the years as well and some key leadership positions probably aren’t as old as you think, based on the historical summary of the House’s total membership dating back to 1812. The document was last updated by the library’s staff in April.
Here are four interesting takeaways from the research:
— Members of the Louisiana Legislature were elected every two years until 1880, when voters began selecting members of the House and Senate every four years.
— The Legislature did not meet in 1813, due to the War of 1812. The body also did not meet in 1815, due to the Battle of New Orleans.
— During the Civil War there were two elected legislatures meeting simultaneously. (There are very few records documenting the Confederate legislature, which met in north Louisiana.)
— The position of speaker pro tem did not exist in Louisiana until it was created by resolution on the first day of the 1972 regular session. That’s when then-Rep. Kenneth Leithman of Jefferson Parish was elected by acclamation as the very first speaker pro tem.