Republicans clash over House budget compromise

Republicans clash over House budget compromise, because of cuts to tax break programs

Associated Press

BATON ROUGE, La. (AP) -- House Republicans were at odds Tuesday over a bipartisan budget proposal that contains $329 million in cuts to tax break programs that largely benefit businesses, a compromise that has GOP lawmakers clashing with their governor, state party and traditional allies.

The divide within GOP ranks threatens to sink the House budget compromise, unless a bloc of conservative Republicans called the "fiscal hawks" that has been negotiating the budget deal with Democrats can hold its coalition together.

"The Republicans are going to be harder to sell than anyone, because the party and the (Jindal) administration are so adamantly opposed to these changes, but I think we're going to be fine," said Rep. Brett Geymann, R-Lake Charles, a leader of the fiscal hawks.

Gov. Bobby Jindal was making a strong bid to squelch the proposal, assembling a group of industry lobbyists at a press conference to criticize the budget proposal as a job killer that could harm the state's reputation and damage economic development efforts.

Geymann acknowledged Tuesday evening that brokers of the compromise don't have the two-thirds support in the House needed to pass the pieces of the budget deal, but he said Republicans are continuing conversations and "it's a very reachable goal."

House Speaker Chuck Kleckley, R-Lake Charles, remained uncommitted about whether he'll support the budget compromise, saying his staff was reviewing the details.

The deal proposed for House floor debate Thursday would rework the $24.8 billion budget submitted by Jindal for the fiscal year that begins July 1.

It would use $329 million from shrinking tax breaks and levy $106 million in cuts to travel expenses, contracts and other items as a way to replace patchwork, uncertain financing used by Jindal and opposed by the fiscal hawks as creating continuing cycles of budget problems.

Jindal and the state Republican Party are blasting the plan as a tax hike on businesses and families, and the proposal pits GOP lawmakers against some usual allies, including tea party leaders and the powerful Louisiana Association of Business and Industry.

"These tax increases would not only kill jobs, but they would send a message all over America to businesses and to families that Louisiana will change the rules and raise your taxes if you're thinking about moving here and investing here," Jindal said.

The budget proposal would make a 15 percent across-the-board cut to tax credit programs for the film industry, historic building rehabilitation, recycling manufacturers, milk producers, child care facilities and others for four years.

Businesses that currently don't pay the 4-cent state sales tax on utility bills and manufacturing equipment would see those tax exemptions cut in half, so they would have to pay a 2-cent sales tax on those items — also for a four-year span.

Jindal's economic development secretary, Stephen Moret, said changes to the tax incentive programs could break contractual obligations the state has with companies and could jeopardize pending negotiations with other firms seeking to expand or locate in Louisiana.

"This sends a shockwave into corporate boardrooms," said Dan Borne, president of the Louisiana Chemical Association.

Supporters of the compromise deal say it closes loopholes for special interest groups and protects higher education and health care services from deep slashing. The fiscal hawks say the package also includes long-term changes to the budget process that will stop repeated shortfalls.

Part of the deal is passage of bills that would limit the use of piecemeal funding from land sales, legal settlements and other one-time sources of cash to pay for ongoing expenses. When the dollars fall away each year, lawmakers and the governor must find new ways to fill the gap.

"We're trying to solve the problem," Geymann said. "We will not have a hole to fill at the beginning of the next year that was caused by accounting gimmicks."

The Republican Party of Louisiana says lawmakers are violating pledges they took against raising taxes.

Rep. Joel Robideaux, R-Lafayette, a leader in the compromise budget talks, said he thinks the lobbying efforts against the deal will peel off some votes, but he thinks it's still possible to reach the two-thirds hurdle needed for passing the compromise package.

He said the attacks by the state Republican Party against their own members are taken by most GOP lawmakers "with a grain of salt," because the state party leaders are considered simply a mouthpiece for Jindal.

But some Republicans are individually criticizing the compromise budget proposal.

Newly-elected Rep. Julie Stokes, R-Metairie, stood with the governor at a press conference in opposition, saying she believes the proposal would move the burden of balancing the budget to business. Rep. Lenar Whitney, R-Houma, said government should "operate within its means," not look to generate new revenue.

Republican Rep. Alan Seabaugh of Shreveport, who has been a member of the fiscal hawk group, sent out an open letter — circulated by the Tea Party of Louisiana — denouncing the budget compromise and slamming the governor's use of one-time money.

He called Jindal's approach to the budget "irresponsible and shortsighted." But then he added, "However, the current plan being brokered, which raises taxes on the people of Louisiana, is monumentally worse."

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