- Associated Press - Wednesday, June 3, 2015

BATON ROUGE, La. (AP) - In a rebuke to Gov. Bobby Jindal, House lawmakers Wednesday rejected a proposal sought by the Republican governor to maintain his record against tax increases, upending budget-balancing negotiations.

The House Ways and Means Committee shot down the bill with a narrow 10-9 vote. But senators, trying to keep the measure alive, added it to three other bills later that evening, ensuring the debate would continue.

The disagreement raises questions about whether lawmakers can agree on a way to balance next year’s $24 billion budget with financial plans that can escape Jindal’s veto.

“We’ve got time to talk and quit all the sword-rattling … and see if we can’t reach some agreement,” said Senate President John Alario, R-Westwego.

The legislative session must end June 11.

The bill in dispute - by Senate Finance Committee Chairman Jack Donahue, R-Mandeville - would create a new higher education tax credit as a complicated means to let Jindal claim he hasn’t raised taxes to close next year’s budget shortfall.

“It’s a way to go about having a budget that this governor might sign,” Donahue told the House committee.

Opponents say the proposal is a sham, aimed at protecting the governor’s presidential ambitions. Rep. Eddie Lambert, R-Gonzales, called it a “gimmick.”

“I don’t know if you’d call it laundering money or what you’d call it,” he said.

Jindal, expected to announce his White House bid later this month, won’t support any tax changes he - or national anti-tax activist Grover Norquist - considers a net tax increase.

With a $1.6 billion budget hole next year, lawmakers and the governor have acknowledged they must find ways to drum up new dollars for the budget to keep from devastating higher education and public health care programs.

The House didn’t bother meeting Jindal’s criteria with its budget-balancing plan, which involved $615 million in tax hikes and scaled-back tax breaks. Senators, however, are trying to meet the complex set of parameters set by Jindal to avoid a veto of the financing plans for the fiscal year that begins July 1.

Donahue’s higher education tax credit bill is critical to making the veto-proof deal work.

“You have to have this,” Alario said.

The proposal would involve raising a new “fee” on college students. The students wouldn’t actually pay the fee because it would be covered by the state through the tax credit, paid directly to colleges and offset with tax increases elsewhere, like a cigarette tax hike.

It doesn’t provide any new revenue to the state or to colleges, but is used for Jindal to claim an offset to other tax increases so he can say the state didn’t raise taxes to balance the budget.

“There’s no real money here,” said Rep. Robert Johnson, D-Marksville.

Higher education leaders, worried they face budget cuts if lawmakers and the Jindal administration can’t work out a tax deal, are pushing for the tax credit’s creation.

“Without this bill, I do not see a tax-neutral budget, and without a tax-neutral budget, I do not believe higher ed will get the money that is currently contemplated for them,” said Revenue Secretary Tim Barfield, the governor’s point person on the tax negotiations.

Ways and Means Committee Chairman Joel Robideaux voted against the bill, so Donahue added the language to three of Robideaux’s bills that were up in Senate Finance by Wednesday evening.

“The Ways and Means Committee threw stones at Sen. Donahue, and we threw stones back. It happens all the time,” Alario said.

Jindal’s chief of staff Kyle Plotkin said a deal can be struck: “There’s still time to get a budget done that is balanced, protects higher education and health care and doesn’t raise taxes.”

___

Online:

Senate Bill 284: www.legis.la.gov

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