15 December 2006

Floor action, Dec. 15: HB 52, HB 120, HB 59

HB 52 would create a fund in which to dump money to be used for economic development purposes. As its Senate handler Sen. Jody Amedee emphasized, no money that would violate the state’s spending cap would be put into it, it would probably come from the general fund, and it could create many high-paying jobs. Sen. Rob Marionneuax, however, wanted to know if additional money would be required from the state, which Amedee didn’t exactly know, as he thought it could be a billion dollars more the state would have to commit besides this $300 million. Marrioneuax also thought too much trust was being asked of the state with too much uncertainty in its return, and wondered how much the land was really worth.

Sen. Pres. Don Hines said he knew of another project where all sorts of feasibility studies and information had to be provided before the state invested in it. “We ought to be consistent,” he argued, implying the sugar mill he had backed a couple of weeks earlier should have gotten such easy treatment as this proposal seemed to be getting. Amedee confessed he didn’t know a whole lot about the project in terms of what would happen after the state bought the land and prepared it. Sen. Charles Jones pointed out that much information could not be made public because of competitive reasons to get the project for which the bill was designed.

Sen. Walter Boasso proposed an amendment to cap the fund at $300 million and basically would apply only to the project being recruited. It passed without objection.

Marionneaux said despite confidentiality, surely some financial statements could be worked up about the project. He said this giveaway to a foreign firm was inappropriate given that citizens in the state needed assistance and yet the Legislature didn’t seem willing to provide it. He argued that others had to be content with tax credits, so why should this firm merit any additional help? Sen. Chris Ullo said the benefits would be clear enough without exact figures.

Marionneaux then sent up an amendment that said if the plant did not come to the state, the money would be divided up to give pay raises to various groups. Sen. Art Lentini (Senate parliamentarian) pointed out that the multiple purpose of the bill would violate the Constitution, since it is not a general appropriation. Marionneaux said he knew of past bills of this format which had not been ruled unconstitutional, but he said he would not object to dividing the bill. Se. Robert Barham noted that if the amendment went through and it took awhile for the mill to make a decision, then the raises could go through in addition to the site expenditure if the firm decided to come. It ended up being defeated 12-23.

Amedee said he appreciated what Marionneaux had tried to do for state employees, but those measures could be dealt with in the future and even applied retroactively, but this measure had to be dealt with now in order to have any shot at landing the project. The bill passed 31-4.

HB 120 would provide tax credits to those who had to pay excess insurance assessments to bail out the state insurer. Sen. Ken Hollis wondered how expensive it would be to send out some checks, as some monies will be due to people who do not have income tax liability. Handler Sen. Willie Mount didn’t think the costs would be as high as Hollis had heard, even if it was more complicated because it would have to be calculated on a parish-by-parish basis.

Sen. Gerald Theunissen wanted to know why the “noncompetition factor assessment” was now included, pointing out that the bill now would refund past payments now required by law for those who were insured by the state insurer that they are required to pay, a 10 percent surcharge of the market rate. He said it would be better to tackle that issue in the regular session, not as part of this bill.

Sen. Julie Quinn proposed to get rid of that amendment, saying more time was needed to study that surcharge issue. But the author of the amendment added Sen. Nick Gautreuax said too few companies were writing policies necessitating the existence of the surcharge, so relief should be now and he promised if the amendment passed he would bring the issue back up in regular session. It passed with objection, and the bill passed 35-0.

HB 59 would extend a $125 tax credit to each qualifying child to any family, regardless of whether a head of household had any income tax liability, and also provides a 2 percent credit on medical expenses, casualty losses, charitable donations, and home mortgage expenses. Barham asked for a ruling about whether the addition of the 2 percent credit would push the bill over $500,000 in impact, requiring referral to the Finance Committee. Pres. Hines ruled against it, saying the Revenue and Fiscal Affairs Committee had sufficient authority to deal with this matter.

Sen. Robert Adley, who had added the 2 percent credit, pleaded with the Senate to pass it even if they were not fans of other parts of the bill. He said it was like a pay raise for everybody. Sen. Diana Bajoie wondered whether this would disproportionately help people at higher income levels, but Adley said anybody who paid taxes would be helped by this part of the bill. He pointed out that since it was 2 percent, it would provide a direct offset to the payers in the lowest bracket, but only half at the 4 percent bracket, and just a third at the 6 percent level. Hollis pointed out that the language exactly duplicated other bills introduced this session once supported by the governor.

After Adley concluded, Hollis then asked for an adjournment sine die until the regular session (after being corrected in its format by Sen. Cleo Fields). His motion failed 12-22.

Bajoie said she just couldn’t support it, more out of protest with other things she said were being ignored, even with the credit, saying it wasn’t a fair choice and hoped the handler Sen. Lydia Jackson would withdraw it. After a clarifying amendment by Sen. Noble Ellington was adopted without objection, Jackson closed, pointing out they were debating income tax credits appealing to a wide spectrum of taxpayers. Even though some would be going to non-taxpayers, she argued that a boost in sales taxes was supporting the extra revenue forgone, paid by many who don’t pay income taxes. The bill passed 28-6.

The House concurred with HB 52 and HB 120. But it then adjourned sine die without making a decision on HB 59, thereby killing it, by a vote of 49-42.

I supported your syrup mill.
I wish you were governor.

Hines to Amedee during the HB 52 debate.

THIS WEEK FOR THE GOOD: HB 120 passed House committee, the House, Senate committee amended, the Senate amended, and the House concurred.

THIS WEEK FOR THE BAD: HB 59 passed House committee amended, the House, Senate committee amended, and the Senate amended.

I’m going to dispense with this because the above two bills are the only important ones that even made it to the floor of either house. And thus closes the 2006 legislative year.

12 December 2006

Floor action, Dec. 12: HCR 6, HB 59

HCR 6 came up again for a vote, in the form of calling it from the calendar, and got slightly more support, 60-37. Rep. Jeff Arnold voted for calling it as opposed to opposing its passage yesterday, while Reps. Billy Montgomery and Joe Toomy, who had voted against it yesterday, were absent. But this still was 10 votes short of the required two-thirds to bust the state’s spending cap.

HB 59 would provide an income tax credit of $50 for any parent in Louisiana. Author Rep. Yvonne Dorsey asked to increase the credit to $75 while suspending the education tax credit, which was done without objection.

Rep. John LaBruzzo wanted to amend away the most objectionable part of the part, which would not allow money to come back to people who do not pay taxes, and would extend the credit retroactively back three years cumulatively as well as increasing it to $100 per year. Thus, if a tax liability for the preceding three years was at least $300, all would come back to the individual. Dorsey objected, saying it was to help “working” families, without justifying why people who did not pay up to $100 a year in income taxes should get any money from others who do pay taxes in the state. Rep. Juan LaFonta argued disabled veterans would be unable to claim this according to the amendment. Rep. William Daniel IV requested a division of the amendment, for a vote to make for an amendment for $100, and then to only go for those who pay enough income taxes carried forward for three years. That first one failed 44-48, and the second failed 23-71.

Dorsey closed on it, pointing out this kind of earned income tax credit was applied by the federal and state governments in other ways. The bill passed 97-0.

If you hire a good CPA, you shouldn’t have any income liability.
Rep. Joel Robideuax, who is a CPA who prepares income taxes in part for a living

10 December 2006

Committee and floor action, Dec. 10: HB 121

Bill introductions, referrals, and committee work are happening almost simultaneously in this compressed session:

THE GOOD: HB 120 by Rep. Taylor Townsend would allow a refundable income tax credit for assessment made to homeowners paying special insurance assessments to fund deficits in the state-run insurer.

THE BAD: HB 121 by Townsend would give a $75 per child tax credit but then suspends the $25 credit for educational expenses, which would force the state to give out money to people who do not pay income taxes.

The House resumed recessed to allow its Ways and Means Committee to work on HB 120, which passed with objection. Then it went back to business but almost 45 minutes late, bad by even its standards.

No doubt this was to try to gauge support for raising the state’s expenditure limit. It must not have been entirely successful, because when it returned the request, which had passed committee the previous day 13-3, was placed into five separate yet identical resolutions and all shipped to committee. The House then adjourned.

I just want to say that the Independents are going home.
Rep. Joel Robideuax, the Legislature’s only independent, after leaders of the Democratic Caucus and Republican Delegation announced meetings after adjournment.

09 December 2006

Committee action, Dec. 9: HB 21, HB 30, HB 59, HB 69

The biggest issues in front of the House Ways and Means Committee were HB 26, HB 27, and HB 28, and HB 30, all reported favorably by the committee. These bills all addressed new tax credits that represent a partial reversal of their removal three years ago. In essence, the first three are all part of HB 30 but it also would include HB 29 and their author Chairman Rep. Taylor Townsend for whatever reason did not want to move passage on HB 29 as he did with these other bills.

HB 59 by Rep. Yvonne Dorsey would provide a $50 tax credit per child. Because if a filer’s tax liability was less that the amount eligible they would get a refund despite not paying enough in taxes, or any taxes at all. Rep. Cedric Richmond wanted to increase it to 21 if a child still in school, but averred he would wait until later in the process. It then passed favorably without objection.

HB 69 by Taylor essentially was a redo of past legislation authored Rep. Billy Montgomery. Ten years ago, it was supposed give tax breaks for truck purchases, on a temporary basis but renewed several times and made permanent in 2004. But because apparently it was inexpertly written, it did not do what was intended and instead vehicles operating in Louisiana would be purchased and registered in other states, which also spurred building terminals in other states (Oklahoma and Texas, mostly). After some more discussion, mainly Richmond observing some kind of fuel conservation measures might/should be a part of this bill, it was reported favorably without discussion.

HB 21 (amended to make Townsend the author) would give tax credits to sugar cane farmers for transporting their product. This was in response to Gov. Kathleen Blanco’s promise to provide aid to these farmers instead of spending huge amounts of state money to build them a mill a little closer to where the cane is grown. This would cost at least $3 million a year.

Richmond asked about other breaks that sugar farmers got, and was told there were some. He also was concerned that this law would not encourage reduction of transportation costs which would degrade highways and the environment. Rep. Ken Odinet wanted to know if the bill covered raw sugar; it did not.

Rep. Lelon Kenney asked why only sugar farmers were being advantaged this way; why not all people in involved in agriculture? But it was pointed out that the call limited the subject matter to just that commodity. Nonetheless, Rep. Jeff Arnold authored an amendment basically to allow many different products to receive the credit and more of it. Rep. Damon Baldone said this would put perhaps cost the state too much and had germaneness problems. Arnold said it should be passed now and any germaneness question dealt with later. But it failed 6-9.

Baldone then asked for an amendment that would take off the mileage restriction, which was not to pay the credit for the first and last 50 miles. Many were concerned that the costs would escalate dramatically as a result. The amendment was passed without objection, and then the bill was adopted without objection.

“He’d be coming in here to tell us that about right now.”
Townsend, responding to Richmond’s comment that recently elected Shreveport Mayor Cedric Glover, formerly on the committee, had passed along a message to them dealing with a matter about an hour into the meeting, making light of Glover’s penchant for showing up late to committee meetings.

08 December 2006

Legislative second extraordinary session through Dec. 8

Welcome to coverage of the 2006 Second Extraordinary Session of the Louisiana Legislature. As in the past, this blog will identify the best and worst bills from the session from Dec. 8 to possibly Dec. 17, and periodically report on the committee and floor actions, and the ultimate fate, of these bills. Actually, almost all committee action is going to occur in the House Appropriations and Ways and Means Committees given the nature of the session call, although some bills might end up heading straight to the floor. We’ll see what happens.

Note that in the list below that there are similar bills out there for some of these. If bills other than these but like them begin to move through the Legislature, they will be tracked instead of these, and identified at the time. Without further ado:

THE GOOD: Both by Rep. Pete Schneider, HB 9 and HB 10 would start reducing the unfunded accrued liabilities in the state’s pension funds. His HB 42 would abolish the duplicative and overly politicized Insurance Rating Commission. His HB 61 would cut income taxes for all except the lowest tax bracket. All by Rep. Taylor Townsend, HB 26, HB 27, HB 28, HB 29, and HB 30 would undo some tax deductions that once were but now are unavailable to Louisiana income taxpayers that are available for federal tax filers, on home mortgage interest points, some medical and dental expenses, some casualty and theft losses, for some charitable giving, with the last enabling all of it. His HB 66 and HB 67 would accelerate already planned tax cuts related to franchise fees for corporations and machinery purchases. HB 72 by Speaker Joe Salter would create the structure by which any 2005 insurance assessment paid by policyholders to offset losses incurred by the state-run insurer be reimbursed.

THE BAD: HB 21 by Rep. Charlie DeWitt would provide a subsidy by tax credit for the already-overproductive sugar cane industry. HB 31 by Rep. John Alario would include supplemental pay raises for public safety officers, but there is no guarantee that in the long term the state can afford these. His HB 89 creates a large set of funds in which to dump money most of which are unadvisable (such as creating a state-run catastrophe pool) and also tries to get around legal restrictions placed on recognizing surplus funds. HB 59 by Rep. Yvonne Dorsey makes a good idea bad by allowing a child tax credit of $50, but then allows those who don’t pay any taxes to collect it as an overpayment. HB 81 by Rep. Cedric Richmond would raise the minimum wage for state employees, forcing wages everywhere by artificial means thus stifling productivity. HB 109 by Rep. Juan LaFonta would encourage the state to compete against private insurers by not making the state-run insurer charge a higher rate.

SATURDAY: HB 31, 72, and 89 are scheduled to be heard by the House Appropriations Committee; HB 21, 26, 27, 28, 29, 30, 31, and 59 are scheduled to be heard in the House Ways and Means Committee.