Key Piece Of Budget-Balancing Plan Meets Resistance In House

BATON ROUGE (AP) — Lawmakers in the House have stalled a key piece of legislation sought by Gov. Bobby Jindal as part of the state's budget-balancing plan, a bill designed to allow the governor to maintain his record against tax increases.

         The House Ways and Means Committee canceled its planned Monday meeting to consider the bill by Sen. Jack Donahue to create a new higher education tax credit as a complicated way to let Jindal claim he hasn't raised taxes to close next year's budget shortfall.

         "I plan to reschedule after giving Sen. Donahue and the administration time to address questions that have arisen," Committee Chairman Joel Robideaux, R-Lafayette, said in a statement.

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         The delay raises questions about whether the House will pass the Senate-backed bill and could upend ongoing budget negotiations with fewer than two weeks remaining in the legislative session. Without passage of the tax credit bill, tax changes used to balance next year's $24 billion budget face a veto threat from Jindal.

         But some lawmakers, particularly Democrats, have criticized the proposal as an unnecessary sham to protect the Republican governor's White House ambitions.

         Jindal, building a likely presidential campaign, won't support any tax changes he — or national anti-tax activist Grover Norquist — considers a net tax increase.

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         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 about what types of tax changes he's willing to support, to avoid a veto of the financing plans for the fiscal year that begins July 1.

         That's where Donahue's higher education tax credit bill kicks in.

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         The measure would create the Student Assessment for a Valuable Education, or SAVE, tax credit. 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's essentially a pass-through that doesn't provide any net new revenue to the state, but that 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.

         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 SAVE tax credit.

         Louisiana's higher education commissioner, Board of Regents and presidents of the four college system issued a statement calling the Donahue bill "a viable solution that will reduce the fiscal needs for higher education and positively impact the future prosperity of this state."

         – by AP Reporter Melinda Deslatte

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