Stephen Waguespack, president of the Louisiana Association of Business and Industry and a former chief of staff to Gov. Bobby Jindal, came out swinging last week against Jindal's budget plan.
Gov. Bobby Jindal must be wishing the state budget had one more year to go before some hard decisions had to be made. By that time, he'd be out of office (and probably out of the state), while his successor and state lawmakers would be trying to pick up the pieces after years of structural budget deficits. As it is, the governor's proposed budget for 2015-2016 — which attempts to close a $1.6 billion gap created mostly by Jindal's fiscal policies — pleases no one.
Not college students, who face significantly higher "fees" and the possibility of some state schools closing. Not sick people, who have less access to health care because Jindal refused to expand Medicaid under the Affordable Care Act — and now more public hospitals and clinics may close. Not the film industry, which is issuing grave warnings at any talk of curtailing the state's lucrative tax credits. Not even smokers; Jindal vetoed the renewal of a four-cent cigarette tax in 2011 but now seems OK with higher cigarette taxes.
Oddly, the unhappiest group of all is one Jindal has spent his tenure assiduously courting: business and industry.
The unhappiest group of all is one Jindal has spent his tenure assiduously courting: business and industry.
Among Jindal's proposals is a change to the state's refundable tax credit program by making credits non-refundable when they exceed a company's state tax liability. If adopted as proposed, the change would raise more than $500 million. Refundable tax credits are actual payments from the state treasury to qualifying taxpayers, mostly businesses — often for payment of local taxes. Currently, if a company's tax credit exceeds the state tax owed by that company, the company gets back more from the state than it owes the state. Jindal proposes to limit the amount of the refund to what a company owes the state, even if it paid more than that in qualifying local taxes. The majority of the affected credits involves local inventory taxes. Jindal proposes using the money generated to help pay for higher education and health care, and his spokesman, Mike Reed, insists that all this is not a new tax. That is quite a stretch, because it sure will feel like a tax hike to affected businesses.
Naturally, business organizations are howling, especially the Louisiana Association of Business and Industry (LABI), whose president, Stephen Waguespack, was once Jindal's chief of staff. LABI rightly calls it a new tax and has vowed to fight it. So have the Louisiana Oil and Gas Association and the National Federation of Independent Business, whose state director, Dawn Starns, characterized Jindal's proposal as a "$377 million tax increase." So much for the governor's vaunted "tax virginity." Team Jindal will have a tough time spinning this one when the criticism comes from folks who used to be his staunchest allies.
The truth is that Jindal inherited a $1.1 billion surplus in 2008, quickly squandered it, then drove up a $1.6 billion deficit during the next six years. He used non-recurring sources of money — some of which never materialized — to prop up sagging budgets, and now it's time to pay the piper.
As he prepares to run for president, Bobby Jindal will have to answer to poten-tial voters for two fiscal sins: turning the state's ledger from black ink to red ink and raising taxes.