BATON ROUGE — Gov. Bobby Jindal said Thursday he won’t support a legislative effort to temporarily suspend tax breaks to drum up quick cash to patch together next year’s budget.
The Republican governor, in a sit-down with reporters to recap the second week of the legislative session, said he’s told legislative leaders that he would consider the move a tax increase and he would veto a budget dependent on it.
“I made it very clear to them that we’re not encouraging any kind of games or workarounds or loopholes,” he said.
But he added: “I don’t think we’re going to get in that situation.”
Jindal said he thinks lawmakers will find a longer-term solution to the state’s $1.6 billion budget shortfall, with tax changes and spending reductions that he won’t consider a net increase in taxes.
Lawmakers looking for ways to stop deep cuts to health care services and college campuses have filed an array of measures to make tax changes that would generate new money for the state.
Two dozen proposals are temporary suspensions of tax credits, rebates, exemptions and deductions that could provide a short-term fix to balance the budget if lawmakers can’t reach a broader, long-term agreement on tax changes.
The idea behind the temporary proposals is that a tax break suspension would generate money for the next year, while a new governor and new Legislature elected this fall comes in and works to restructure Louisiana’s tax structure and spending protections.
Jindal couldn’t veto the resolutions that allow for the temporary tax break suspensions — but he could veto a budget bill tied to them. His threat to do so could kill efforts to advance those pieces of legislation, since a veto override takes a hefty two-thirds vote and lawmakers traditionally don’t support veto overrides.
One caveat could be if lawmakers include the temporary tax break suspension as part of a larger plan that Jindal wouldn’t consider a net increase in taxes, an idea that seems like a long-shot.
Lawmakers are trying to stay within guidelines set by Jindal about what sorts of tax changes he’ll consider, parameters set in accordance with the policies of national anti-tax activist Grover Norquist.
In his budget recommendations, the governor proposed to lessen state spending by more than $500 million on a dozen refundable tax credits in which the state writes a check to businesses above their state tax liability.
But legislators have resisted the proposal, which faces strong opposition from business leaders, and instead have come up with their own ideas.
This week, the Senate Finance Committee approved a bill to repeal the local property tax charged on inventory. The maneuver would save the state more than $500 million a year that it gives businesses in tax credits to offset the expense.
Next week, the House Ways and Means Committee will consider proposals to raise the cigarette tax and scale back tax breaks for the film and solar industries, among other ideas.
Jindal commended lawmakers for making progress in the budget negotiations.
“This will obviously be a complicated process. There will be a lot of moving parts,” he said.
