Fiscal Year 2012-13 is just half over but more deep budget cuts will be announced on Friday and, in the words of one state official, “It ain’t gonna be pretty.”
And the latest fiscal problems haven’t even encountered a looming tax rebate program being offered to encourage financial viability of state charter schools, a centerpiece of the Jindal administration.
With health care and higher education already devastated by previous cuts, it’s anyone’s guess who will suffer in the new round of belt tightening.
Higher education has already been hit with more than $426 million in cuts since 2009—$25 million since June—and Gov. Piyush Jindal has been conducting a fire sale to unload state hospitals and prisons, so it’s difficult to pinpoint where other cuts can be implemented.
The Revenue Estimating Conference will meet on Thursday and the Joint Committee on the Budget will meet on Friday to officially hear the bad news.
Without specifics (because they weren’t available when this was written), that bad news is:
• Personal income tax revenue is below projections;
• Corporate income tax revenue is below projections;
• Severance tax revenue is below projections (because of an unexpected drop in the price of natural gas);
• Sales tax revenue is below projections.
With the bulk of state revenue coming from income taxes and sales taxes, the news, it seems, couldn’t be much worse.
But it might.
Remember the alternative fuel tax credit?
That’s the bill authored by former Rep. Jane Smith (R-Bossier City) that promised a tax credit of up to $3,000 for vehicles that burn “alternative fuel. It was estimated at the time that the tax credit would cost the state $907,000 over five years.
After losing her bid to move up to the Senate in 2011, Jindal rewarded her loyalty (read: dedication to tax breaks) by appointing her as deputy secretary of the Department of Revenue.
The intent of the bill was to encourage the conversion of vehicles to propane but between the passage of Smith’s tax rebate bill and its implementation, flex-fuel vehicles that run on a blend of up to 85 percent ethanol hit the market.
These vehicles immediately qualified for the rebate and the real cost turned out to be more like $200 million, an increase of almost 1,900 percent after then-Revenue Secretary Cynthia Bridges got around to creating rules for the program.
Caught in a potential fiscal crisis over the tax credits, Jindal promptly fired Bridges, promoted Smith (who authored the bill in the first place) to interim secretary and rescinded the tax credits.
Now, a similar scenario may have arisen in the form of last session’s House Bill 969.
HB 969, by Rep. Kirk Talbot (R-Baton Rouge), which was subsequently signed into law by Piyush as Act 25, offers tax rebates to those making contributions to charter schools.
Piyush vetoed a similar bill by Rep. Katrina Jackson (D-Monroe) that would have given tax rebates of up to $10 million to those making contributions to public schools because, he said, there was no provision in the state budget for the rebates.
The only problem is, the provisions of Act 25 contain no dollar cap which, like the alternative fuel tax, could blow a gaping hole in the state’s budget should a sufficient number of people make contributions to the private scholarship program.
It’ll be interesting to see how the Boy Blunder handles the latest financial crisis since the state is running out of one-time money with which to plug budget holes, thousands of state jobs have already been eliminated, there are few remaining assets that can be sold off, and health care and higher education have already been cut just about as much as they can stand and still function.
Perhaps Piyush might actually see the need to jettison a few six-figure appointive positions handed out to former legislators like Smith, Noble Ellington, Troy Hebert, Lane Carson and numerous others.
That would be a start—a show of good faith, at least.
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As a mathematician, I must protest that you are giving π a bad name.
Please don’t hold your breath waiting for Jindal to cut any of the 6 figure positions you speak of.
There’s aways money in the budget for crony positions and crony contracts. It’s everyone else, including taxpayers, who need to do more with less. Swindle Jindal (from Brown U) will not be beholden to that liberal conspiracy known in other quarters as arithmetic.
Well of course we know he won’t eliminate these spots as he’ll insist that they are essential and I guess they are as most states go. So how about giving all senior administrative officials a 50% pay reduction so they would at least be pulled in line with top salaries of these spots in other states. Then it won’t present such a glaring inconsistency in Piyush’s light of day. Just don’t compare population size or actual ability to do the job they are granted. Silly me, what was I thinking? This would be ridiculous in The Alternate Reality of Pi.
I would not bet the farm on that happening – the jettisoning, I mean.
Time for the great governor to sit with the great president and see if we can get the federal dollars associated with the ACA. May have to reflect on the possible effect on his future but I am sure our goverrnor will do the right thing (duh).
Our Govener would not know the right thing to do if it hit him right smack dab between his eyes!!! IT’S THE SAD TRUTH
It is time to consider the revenue side of the state budget and restore the Stelly plan
Per Wikipedia:
A similar behavior called Münchausen syndrome by proxy has been documented in the parent or guardian of a child. The adult ensures that his or her child will experience some medical affliction, therefore compelling the child to suffer treatment for a significant portion of their youth in hospitals. Furthermore, a disease may actually be initiated in the child by the parent or guardian. This condition is considered distinct from Münchausen syndrome. In fact, there is growing consensus in the pediatric community that this disorder should be renamed “medical abuse” to highlight the real harm caused by the deception and to make it less likely that a perpetrator can use a psychiatric defense when real harm is done.[3] Parents who perpetrate this abuse are often affected by concomitant psychiatric problems like depression, spouse abuse, psychopathy, or psychosis. In rare cases, multiple children in one family may be affected either directly as victims or as witnesses who are threatened to keep them silent.
I think the people of La are the children and Booby be the baby daddy, creating situations that cause harm to the children but draw attention to himself. Note that this is a form of mental illness. Aha!
Completely Off-Subject, but Interesting: In the WSJ op-ed piece, Jindal calls for over-the-counter sale of birth control, eliminating need for prescriptions. If you read the op-ed, he actually makes some sort of sense, but this won’t play well with the hard right in Louisiana. However, Bobby doesn’t care what they think anymore, they’re small potatoes to him now, he no longer needs them…he’s after bigger game.
Link to story covering his comments on contraception: http://bit.ly/VF7kMe
A sign of good faith?? The concept is about as familiar to this administration as Pygmy betrothal assurances.