Government & Politics

Fiscal Hawks, Democrats working to cut one-time revenue from Jindal’s budget

Key Democrats and conservative Republicans in the state House are engaged in private negotiations to forge an agreement that could lead them to dramatically rewrite Gov. Bobby Jindal’s budget currently before the Legislature, lawmakers disclosed to The Lens over the weekend.

The chief goal: eliminating some $500 million in one-time money that Jindal has placed in the budget. Many Democrats and the conservative Republicans known as Fiscal Hawks believe that counting on this money will again lead to midyear budget cuts — which has happened each of Jindal’s five years as governor.

Jindal’s midyear cuts have eliminated health-care programs for the poor and reduced state aid for public colleges and universities. The Southern Media & Opinion Research poll released earlier this month showed that voters overwhelmingly oppose more of these cuts.

The Democrats and the Fiscal Hawks want to offset the loss of one-time money by eliminating or reducing tax exemptions and credits and by cutting spending, such as on consulting contracts.

A clue to whether the alliance can be secured will be seen Monday when the House Appropriations Committee hears four measures pushed by the Fiscal Hawks that would make it harder for the Legislature to spend one-time money on annual expenses and would require lawmakers to set spending priorities that would guide later cuts if they become necessary.

An alliance between the Democrats and the Fiscal Hawks would present perhaps the biggest problem Jindal has faced yet in the state Legislature, which is growing increasingly restive during his sixth year as governor.

Two of the lead negotiators, state Rep. Cameron Henry, R-Metairie, and state Rep. Sam Jones, D-Franklin, told The Lens that the two sides hope to seal the deal this week. They confirmed the talks after The Lens learned about them.

“Jindal’s budget is under the severest scrutiny since he became governor,” Jones said. “There’s an assault going on.”

Henry said, “Everyone knows that the current budget process is broken and that the current budget that the administration gave to us is not beneficial to anyone’s district.”

The making of an alliance

Jindal has relied on strong support from Democrats in recent years to pass his budget. In fact, more Democrats in the House voted for Jindal’s budget last year than did Republicans. So an alliance between the Democrats and the Fiscal Hawks threatens his grip over how the state spends its money.

The Fiscal Hawks sought out the Democrats, with Henry and state Rep. John Schroder, R-Covington, speaking at the Legislative Black Caucus’ annual meeting in New Orleans in February.

The talks have intensified since the Legislature began its session on April 8. Representatives from the two sides last met Tuesday night in the Capitol at a location they would not disclose. Separately, state Rep. John Bel Edwards, D-Amite, outlined the discussions behind closed doors at a House Democratic Caucus meeting last week.

For the Fiscal Hawks, the issue is simple: With 30 to 40 of the 105-member House, they cannot remove one-time and contingent money from the budget, or make the budget-writing process more transparent, without more support. Contingent money typically becomes available only if the state sells a piece of property as planned.

“The only way to get a solution is with bipartisan support,” said Brett Geymann, R-Lake Charles, the Fiscal Hawks’ leader.

Democrats, meanwhile, are trying to make the best of a difficult hand, given that they are a minority in the House and Senate and cannot muster enough support by themselves to increase taxes or restore some of the funding that Jindal has cut from previous years’ budgets. An alliance with the Fiscal Hawks could at least stem the steady budget cuts under Jindal, they believe. They have about 38 reliable votes.

“The Fiscal Hawks want a more responsible budget with cuts,” said Edwards, the House Democratic Caucus leader. “The second part doesn’t appeal to me. But what negates my apprehension is that if we don’t do something on the budget, there will be midyear cuts anyway by the governor.”

Jindal chief of staff Paul Rainwater told the Fiscal Hawks last week that the administration won’t support any of their measures this year, Geymann said. “They obviously like it [the budget] the way it is now,” he said.

The key players on the Fiscal Hawks’ side are:

  • Geymann

  • Henry

  • Schroder

  • State Rep. Lance Harris, R-Alexandria

  • State Rep. Paul Hollis, R-Covington

  • State Rep. Ray Garofalo, R-Chalmette

  • State Rep. Jim Morris, R-Oil City

  • State Rep. Kirk Talbot, R-River Ridge

  • State Rep. Jay Morris, R-Monroe

“I think the stars are lined up,” said Harris, who heads the House Republican Caucus. “Budget reform has a lot of momentum.”

For the Democrats, the key players are:

  • Edwards

  • Jones

  • State Rep. Jack Montoucet from Crowley

  • State Rep. Katrina Jackson from Monroe, who heads the Legislative Black Caucus

  • State Rep. Regina Barrow of Baton Rouge

Money must be found elsewhere

Commissioner of Administration Kristy Nichols, the chief defender of Jindal’s proposed budget, has said that previous governors also used one-time money and that pulling it from the proposed budget would force a 19 percent cut in spending for higher education.

The Fiscal Hawks are working quietly behind the scenes to identify ways to offset that money.

Henry has taken the lead in identifying which tax exemptions or credits could be chopped or at least made less generous. He mentioned two possibilities:

  • A $25 tax credit for each child in school, which he said cost the state about $18 million last year

  • A tax credit for companies that file sales taxes on time

Henry identified two other programs that could be scaled back:

  • One allows television and movie producers to receive tax credits for their expenses in Louisiana.

  • Another provides tax breaks for investing in so-called “enterprise zones” that are considered economically blighted.

Ending or reducing a tax exemption would require at least 70 votes in the House, the same number needed to override a Jindal veto.

“Nothing can happen without 70 votes this year, so alliances are important,” Jackson said.

The Fiscal Hawks succeeded in stripping one-time money out of the House budget last year but only with a bare majority of votes. The Senate added it back after senators argued that the Hawks couldn’t identify how they would offset the loss of one-time money without cutting the budget.

The Senate’s action forced the House to make a decision: Approve the budget, or reject it and put the Legislature into a special session. Enough Democrats sided with the administration that the House approved the budget.

Would the same scenario be repeated this year? “It’s too early to worry about the Senate,” Geymann said.

Help us report this story     Report an error    
The Lens' donors and partners may be mentioned or have a stake in the stories we cover.
  • jeffsadow

    All well and good if this happens, but it cannot be used as a palliative to the larger structural problem — a fiscal system which misallocates money not on the basis of priority. Where the “hawks” proposed legislation comes up short is at this time it concerns itself more with bookkeeping labels than with any genuine structural reform. But perhaps that will change, although I suspect it will take a different majority to accomplish that than what we see here.

    Note: the article does well to try to draw a distinction between “one-time” and “contingent” funds, and gives an example of the latter label. However, this can get confusing because the Constitution actually forbids expenditures “made under the heading of contingencies,” but “contingencies” refer to expenditures, not revenues. That definition is at the crux of a request made by a couple of the “hawks” to AG Buddy Caldwell to issue and opinion on the matter, in which they try to extend the definition to revenues by saying an appropriation becomes contingent if revenues for it do not come from forecast sources — weak, because forecast themselves vary from what actually transpires, but that’s what they are arguing.

  • Tommy

    Tyler, why you and other members of the press continue to label Rep. John Schroder, R-Covington as a “Fiscal Hawk” baffles me. This is a man who, in his first term, before he proved himself on anything voted to triple his pay, with automatic future raises that would not require a vote. When that failed he voted to double his pay. Finally after the Governor could no longer take the public outcry, he finally vetoed the measure. Fiscal “Hawk”? More like fiscal “Weasel”