State budget a real balancing act

Published 12:00 am Wednesday, March 20, 2013

Party lines are likely to be blurred and loyalties divided when the Louisiana Legislature convenes next month to address the state’s budget shortcomings.
Gov. Bobby Jindal’s recently revealed budget plan, which has played to early mixed reviews, will surely be keynote of the
discussion, which ultimately could yield some head-turning votes.
Jindal’s proposed budget appears to present a gumbo of political ideologies. He is calling for a balanced budget, but his methodology of achieving that goal has already rankled some of the Legislature’s so-called fiscal hawks. Jindal’s balancing act hinges on two key components, neither of which is likely to be regarded favorably by his GOP allies.
One is redirecting $100 million from a hotel-motel tax fund that will serve as a finger in the budget dyke, which is akin to using one-time revenue on covering recurring expenses, always a tough sell to conservatives and overall a risky proposition.
Jindal is also proposing what amounts to a 47 percent hike in the state sales tax, raising the rate from 4 percent to 5.88 percent. Such a massive hike would increase the overall sales tax average to double digits, making Louisiana one of the country’s most taxed states.
Republicans are balking at the shanghaiing of the hotel-motel tax fund, mainly because it comes with the caveat of issuing bonds to cover the void. Essentially, the governor is shifting money from one fund to the budget, then replenishing the previous fund through another loan.
This idea of creating more debt  appears to be gaining traction among Democrats, which is not surprising.
However, political normalcy returns with the sales tax proposal, which would have the biggest impact among the state’s most needy families. In other words, those who can least afford it, including the poor
and senior citizens struggling
to balance their own budges on fix incomes, will be most affected.
Some Democrats are railing against this component, claiming it would be the largest middle class tax hike in Louisiana history.
Jindal has been vocal in his goal to replace the state income tax with an increased sales tax, which may ultimately play to national voters but not so much in Louisiana. The governor also seems to be placating big business by eliminating corporate income taxes and franchise fees but curiously is cutting movie tax credits, which could cripple a burgeoning industry.
Jindal’s proposal is merely a launching point that will almost certainly be overhauled through the negotiation process, but an unscathed budget approved by the Legislature would provide the governor with the political skins required for a national campaign, should he decide to do so.
Political ambitions aside, he must first confer with legislators, and together they can  author a budget that remedies the state’s financial shortcomings and is palpable for all.