Louisiana lawmakers on Thursday agreed on a solution to the state’s worst budget shortfall in decades. They approved a budget plan considered as the only way to gain Gov. Bobby Jindal’s support and avert a looming fiscal disaster.
The proposal to raise no revenue and alleviate nobody’s tax burdens is one of the most critical elements of the funding arrangements that drew most of the debate.
However, a complicated arrangement of tax credits in the plan could allow the Republican governor to claim that despite millions of dollars coming in from hiked cigarette tax and tax break rollbacks, his administration technically not hiked net new tax revenue.
Speaking about the new funding arrangement, Mr. Jindal said, “We view this as a very successful session. We wanted to pass a balanced budget that protected higher education and health care, and did that without raising taxes.”
Even some of those legislators who voted in favor of Mr. Jindal’s tax credit plan found the funding arrangement somewhat questionable. But, they eventually agreed to it, saying it was the only way to prevent the condition from getting worse.
Republican State Representative Blake Miguez called the bill an “embarrassing” measure and said he had to accept it due to “hardheaded” governor.
Without a deal, the pain of a potential $1.6 billion shortfall would have fallen almost totally on healthcare and higher education. Under the terms of the new plan, $350 million of the revenue raised during the session would be dedicated to higher education to prevent cuts.