BATON ROUGE — A key piece of Gov. Bobby Jindal’s proposal to balance next year’s budget sputtered briefly in the House tax committee, which initially rejected the tax plan Monday only to revive it within hours and pass it.
The proposal to scale back a tax credit for companies that pay local property taxes on their inventory could save the state hundreds of millions of dollars each year. But it faces strong opposition from business groups that call it a multimillion-dollar tax hike on companies ranging from local car dealerships to large chemical manufacturers.
The pro-business arguments initially appeared to sway the House Ways and Means Committee, which voted 9-7 against the measure by Rep. Bryan Adams, R-Gretna.
But after a recess and behind-the-scenes negotiation by Committee Chairman Joel Robideaux, the committee returned and changed course. Lawmakers then voted 9-8 to advance the bill to the full House. The committee also approved a similar bill by Rep. Julie Stokes, R-Kenner, with a 13-3 vote.
Robideaux, R-Lafayette, has been urging the committee to move bills to the House floor as legislative leaders continue closed-door talks about how to balance next year’s budget and close a $1.6 billion gap without devastating colleges and health services.
“We are giving the entire body the ability to debate the bills. We are not committing to vote ‘yes’ or ‘no’ on the floor,” Robideaux said to explain the votes. “We want as many of these bills on the floor so that we can consider everything.”
The legislative session must end by June 11, and lawmakers have yet to come up with a plan to close next year’s shortfall. If lawmakers don’t agree with Jindal’s approach, they have to find another way to raise money — or they have to deeply cut state spending.
If deep cuts must be made, public colleges and health care services for the poor, elderly and disabled are the most vulnerable. That’s because those are the least protected areas of the budget.
Higher education leaders encouraged passage of Adams’ bill.
“We want as many options on the table as possible,” said LSU System President F. King Alexander.
Urgency — and uncertainty — appeared to spur the approvals, as lawmakers search for ways to close the budget gap and meet the strict limits of what Jindal will consider as a budget-balancing solution.
Stokes said while the Ways and Means Committee has approved a lot of ideas, “Quite frankly, we don’t have a solution at all.”
Adams warned the committee: “The clock’s ticking, and we’re running out of time here.”
Business groups favor a repeal of the entire property tax on inventory, so the state would no longer pay for the tax break and companies would no longer pay the tax. But that would hit local governments that rely on the tax revenue to pay for police, firefighters and schools.