BATON ROUGE, La. — Public colleges and health care services rely on a complex mix of financing under Gov. Bobby Jindal’s budget proposal released Friday, and gaps still remain for lawmakers to fill if they want to prevent sizable cuts.
Many of the governor’s spending recommendations for the upcoming 2015-16 year rely on separate legislation that must be passed. As the budget negotiations begin, here’s a look at some building blocks of Jindal’s proposal:
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REWORKING TAX CREDITS
A significant portion of the state financing for Louisiana’s public colleges in Jindal’s budget relies on lawmakers agreeing to limit spending on a dozen refundable tax credits.
The governor wants to cap the spending so the state doesn’t cut a check to businesses or individuals for more than the taxes owed in Louisiana. The proposal would generate $526 million, with $372 million earmarked for higher education and the rest plugged into health care programs. That’s half the state financing Jindal included for colleges in his budget.
If lawmakers don’t agree and don’t find another way to fill the gap, colleges would be in trouble.
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WHAT’S ON THE TAX CREDIT LIST?
Jindal wants to shrink spending on tax credits for wind and solar systems, research and development projects, musical and theatrical projects, sugarcane trailer conversions, milk producers, historic residential rehabilitations and vehicle conversions to alternative fuels.
The biggest ticket tax break on the list is the inventory tax credit that refunds businesses for payments of certain property taxes assessed by parish governments. That’s targeted for a $377 million spending reduction, and the proposal faces significant pushback from businesses and the powerful Louisiana Association of Business and Industry.
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REMAINING HIGHER EDUCATION GAP
Even if the tax credit proposal passes or lawmakers find an alternate plan raising the same amount of money, public colleges remain $211 million short in Jindal’s budget of the state financing they receive this year.
To eliminate that gap, the Jindal administration gave lawmakers a list of “revenue-raising options” that it would support, though it also would consider other ideas as well.
They include selling surplus property, letting colleges raise tuition on graduate students, giving campuses more freedom to manage their own insurance programs, selling the remaining piece of Louisiana’s tobacco settlement and redirecting unclaimed lottery winnings.
Another idea floated by the governor involves adding millions of dollars in new fees to college tuition bills and returning the money to parents and students with a tax break. The tax credit would be paid through a tobacco tax increase.
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PAYING MORE FOR SERVICES
In addition to raising costs for college students, the Jindal administration suggested a list of other fee hikes lawmakers could consider to drum up between $30 million and $70 million more a year.
Proposals include higher regulatory, licensing and permitting fees charged of businesses; increases in ferry tolls; new inspection fees for water wells; and higher penalties for late payments of taxes and bounced checks.
Also on the idea list are fee hikes for vehicle registration, online driving records, permits for medical window tints and other charges in the Office of Motor Vehicles.
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LSU HOSPITAL PRIVATIZATION DEALS
Private managers that have taken over the operations of LSU’s hospitals and clinics asked for $142 million more than they received in Jindal’s budget. Lawmakers are questioning if the facilities will have enough money to provide services to Louisiana’s poor and uninsured.
Commissioner of Administration Kristy Nichols said the hospitals were budgeted for the same level of financing they received this year. New Orleans lawmakers said the budget proposal fails to include $88 million their local hospital operator says it needs, particularly when it shifts services from an interim facility to a larger, new hospital.
