Tim Barfield saw a leaked copy of the plan Monday night at home in Baton Rouge after watching a baseball game with his 10-year-old son: Democrats and conservative Republicans known as the Fiscal Hawks want to trim $329 million in annual tax breaks to balance the state’s budget, over the objections of Gov. Bobby Jindal.
Leaders of the Democrats and Fiscal Hawks passed out the plan to their House colleagues earlier that evening in closed-door meetings in the state Capitol.
Barfield, who is Jindal’s point man on tax issues as executive counsel at the Revenue Department, didn’t hesitate before mounting an aggressive countermeasure. He emailed the plan to business lobbyists and trade associations that would face higher taxes. Other Jindal aides joined the effort.
Barfield and other senior Jindal aides met Tuesday at 8 a.m. in the governor’s suite of offices on the Capitol’s fourth floor to plan a blitz with the business community.
“But it wasn’t just us mobilizing them,” Barfield said Wednesday morning, as he stood in a hallway full of passing lobbyists, lawmakers and ordinary citizens. “They were mobilizing us, too.”
Powerful business groups such as the Louisiana Association of Business and Industry activated troops. The state Republican Party joined the fray with recorded phone calls to voters throughout Louisiana asking them to call their state representative in opposition.
It appears to have worked.
On Tuesday, leaders of the Fiscal Hawks said they would have the 70 votes needed to pass their plan.
On Wednesday afternoon, state Rep. Cameron Henry, R-Metairie, one of the Fiscal Hawks’ leaders, admitted that they were short.
“We’re still trying to make members as comfortable as possible,” he said outside the House chamber. “We don’t intend to move any bills this week.”
A new plan emerged Wednesday night that would raise revenue instead by creating a tax amnesty program and trimming only several tax credits, including those for the film industry, the oil and gas industry and so-called enterprise zones. House Speaker Chuck Kleckley, R-Lake Charles, announced Wednesday afternoon that the House would debate and pass the budget Friday, apparently with this element.
At stake is the $24.7 billion budget crafted by Jindal.
The Fiscal Hawks and Democrats say Jindal’s budget relies on unstable one-time revenue and contingency money that will inevitably force midyear budget cuts for the sixth year in a row that will reduce spending on the state’s public hospitals and colleges and universities.
Jindal counters that he is proposing a responsible budget that raises no taxes.
The Fiscal Hawks-Democrats’ plan released Monday night would produce $527 million by shaving nearly 30 tax exemptions by 15 percent apiece to raise $329 million, cutting spending by more than $100 million and using higher-than-projected tax revenue that the state treasury has collected. Doing this would eliminate the one-time and contingency spending for annual expenses, they say.
House Democrats overwhelmingly support the plan, by a 42 to 3 count, according to one survey of their members Wednesday. But a tick sheet of House Republicans from Tuesday night showed that the three-pronged attack by Jindal, the business community and the state Republican Party left only 25 votes in favor and 33 opposed.
“It would appear they’re getting pounded,” state Rep. John Bel Edwards of Amite, the Democrats’ House leader. “We’re holding up our side.”
State Rep. Lance Harris of Alexandria, who heads the House Republican caucus, sat in an empty House chamber Tuesday morning and said they had no other option than passing the Fiscal Hawks-Democrats’ plan.
“We’re representing the taxpayer and the little guys, who have suffered from midyear and end-year cuts,” Harris said. The current plan couldn’t be labeled a tax increase because “tax credits should be construed as a government expense,” he reasoned.
Jindal, however, held a press conference Tuesday to blast their plan as a tax increase.
He called it a “job killer” and said, “This would be exactly the worst thing Louisiana could do.”
Jindal repeatedly said that trimming the tax exemptions would break subsidy deals that the state had with companies to invest in Louisiana.
Six weeks ago a Jindal-backed group, Believe in Louisiana, was running a 30-second television advertisement throughout Louisiana that blamed tax loopholes on lawyers and lobbyists, as he sought public support to rewrite the state’s tax system. On Tuesday, Jindal turned to lobbyists to support his attacks against the Fiscal Hawks’ and Democrats’ plan.
Several notable business lobbyists and executives were arrayed behind Jindal as he addressed the reporters and photographers. Several took the microphone after Jindal, including Saints executive Rita Benson LeBlanc, Dan Borne, the long-time head of the Louisiana Chemical Association and Joe Mapes of the Louisiana Farm Bureau Federation. Jindal looked on approvingly as each supported his plan.
Andre Champagne, founder of Hollywood Trucks, also spoke and didn’t mince his words.
He said losing the full amount of tax breaks would be “catastrophic” to his company, which provides vehicles for the state’s burgeoning film industry. The state’s Motion Picture Investor Tax Credit is one of the tax breaks that would lose 15 percent of their value.
Jindal met with the lobbyists and business executives for 20 minutes before the press conference.
Tucker Crawford, president of the Gulf States Renewable Energy Industries Association, received an email at 11:44 a.m. from Douglas Baker, Barfield’s press secretary, asking him to attend the 1:30 p.m. meeting with the governor. Crawford quickly cancelled a meeting, went to his home in New Orleans to change into a suit and rushed to Baton Rouge. He told reporters that losing the full amount of the tax break for wind and solar energy companies would harm a growing industry that is willing to phase them out over several years.
In the meantime, Mapes had emailed 1,100 local leaders of the farm bureau throughout Louisiana to warn that they would lose a portion of their tax breaks. At 5 p.m. Tuesday, Mapes sent another email that included a link that allowed the recipient to send a message written by the Farm Bureau to their state representative.
LABI, the state’s most powerful business group, also mobilized. Officials there were also leaked the plan Monday night. At 11 a.m. on Tuesday, the group emailed a column by its president, Dan Juneau, to more than 7,000 of its members warning about the plan and asking them to contact their state representative.
The lawmakers immediately began feeling the heat from business leaders in their districts.
“The business community has gotten very loud,” state Rep. Walt Leger, D-New Orleans, said Wednesday morning. “I’m getting emails and calls from business leaders in the city of New Orleans, such as GNO Inc.”
Nonetheless, Leger said he was leaning in favor of supporting the Fiscal Hawks-Democrats plan.
The robo calls launched by the Louisiana Republican Party infuriated many Republican legislators.
State Rep. Jeff Thompson, R-Bossier City, stood in the House basement Tuesday morning shook his head as he looked at his cell phone.
“I just got a phone call from my mother who said she had received a robo call in Bossier City saying I had voted for a tax increase and asking me to call me to vote no,” Thompson said. “It’s a lie. I’m disappointed but not surprised.”
That afternoon, Thompson said he had met with aides to the governor and said they had smoothed things over.