Wednesday, 09 March 2016 16:32

D-Day over Louisiana legislature: Hilburn explains the budget nightmare

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hilburnOn this Louisiana budgetary D-Day, does this legislative special session nightmare sound like accounting gobblygook to you? 

If so, join the crowd.

Which is why I turned to Gannett’s reporter, Greg Hilburn, to explain to me (and to us) just what’s going on as the legislature and Governor John Bel Edwards, the lobbyists and everybody else watching from near or afar, can make sense of the intricacies and nuances of the last day of arguably, the worst budgetary crises session in Louisiana history.

Just how deep is the budge hole?  How might it be filled?  If we are successful, does that mean, everybody can go home and celebrate?  Who’s on first?  What about second?

It’s a mess, as you can see below in my phone Q and A with Hilburn.  And even after the legislative sine die bucket falls at 6:00 PM, don’t be surprised if there’s another budget bucket, only feet away, down the road, desperately needing to be stuffed.

SABLUDOWSKY: Greg Hilburn, with Gannett.  So how are you doing today Greg, last day of the special session, so what's going on?

GREG HILBURN: Last day of the special session, de-breezed my clothes, and re-ironed everything because I've run out but, 6 o'clock, there's even cuts or more taxes, one or the other, they going to balance the budget today.

SABLUDOWSKY: You think so?

GREG HILBURN:I do. They have to. Will be on paper or for real?, Let's see.

SABLUDOWSKY: We had a conversation last year, it was on paper, at least, we found out later although there was some real questions as to whether or not it would be real, we found out that it wasn't

GREG HILBURN: It wasn't anywhere close to being real and that's the problem that were facing now. I do think that most of what was seen so far is real, if you can rely upon the fiscal notes, in the cuts already made, but is still a pretty big gap today, that would have to be closed with revenue or with cuts.

SABLUDOWSKY: Any feeling in terms of how far away we are in terms of this particular fiscal year, I've read reports anywhere from 30 million difference to 100 million, any idea?

GREG HILBURN: I've heard anywhere from, last night, late last night, I think it was President Alario told me, we're 17 or 18 million and then I've heard 40,50 60 million. Some of it depends upon what they do today because there's a lot of legislation pending that will either knock a big hole in that number by closie it up more, for instance, the two biggest things on the cleansing or wiping away the exemptions of the four existing penny-- of course,  you know all this-- and the second would be the new penny, Katrina Jackson's bill, the additional penny sales tax--so goes into instruments that are out there now that have the most bang for your buck. Although there will be some effort to compress, which means raise the income tax rate of some more people to the top rate which is 6%. I think all those other numbers that were looking at.

SABLUDOWSKY: In terms of legislation, at least yesterday, the Senate passed legislation, or at least, the Senate committee passed legislation relative to the cleaning of the penny, am I correct? 

GREG HILBURN: That's right, the original bill by Jay Morris was cleaning the penny, as you know, your soap pl plugged-in, but there's about 200 exemptions on each penny of sales tax, so he cleaned off one penny and other than the constitutional mandated for prescription drugs, and then it went to the Senate committee and they marked off all four pennies which quadrupled the potential impact of that bill. Now whether or not the Senate will keep that, and whether or not it will survive in conference or not, is still in question,, that's one of the items they are negotiating today

SABLUDOWSKY: Is there a enough time?   The conference--we saw what happened here last year, whatever few out of  conference, passed

GREG HILBURN: There's enough time to do it, there's always have time, but whether there's enough time to do it right, that's the difficult question.

SABLUDOWSKY: Right right and that's the question now. So, next question becomes if it's not enough and it falls over until next year, I thought the legislative session coming up is not a fiscal session so they cannot raise any revenue, so therefore, all they can do is make cuts? 

GREG HILBURN: That's right. And right now, that's the big issue. There close to--I really do believe they're close to solving this year's number, but next year, this still far away, because as you know, there won't be a 2 hundred  million BP settlement they can plug-in or 128 million rainy day funds--they're prohibited from doing that and that one-time money will not be available, so there's still a huge gap in the year's budget.

SABLUDOWSKY: : That means another special session, I mean, how else are they going to do it, unless

GREG HILBURN: That's what I think. I know the governor has resisted that idea but I think you'll fall into another special session. The lawmakers, I don't know if they understand, these hard votes on taxes or the hard cuts--either one, they'll catch a lot of grief about it.   I would want them, I would only want to do it one time, I wouldn't want to have to do it twice.  And that's what they'll have to do if it spills over to another special session.

SABLUDOWSKY: Which is why I threw out that may be Waguespack Idea, in terms of the two pennies, not that I would want that, but it just made sense, that--you can bring in around 900 million dollars that will go so, twice.

GREG HILBURN: You can, that really blew up over the weekend, and had so much pushback from the Democrats, that the governor had to call a press conference to say that he's against it and the Democratic House Caucus leader, Gene Reynolds of Minden, he said, as of late last night, last time I talked to him, he said it's a nonstarter, he said that members will not vote on that because they consider it aggressive, I mean regressive and impacts the poor, which I think everyone does, but those are two, the penny you were talking not now and those four existing clean penny's, I know it sounds crazy but those are two measures left, unless they are able to convince to compress the income tax. That won't help this year but it will help next year. And I think the Republicans would be very risk-resistance to that. So, this still so much in the up in the air as the morning hour begins

SABLUDOWSKY: Right, and so, it seems to me, and I think you'll agree that were looking at another special session because they cannot raise revenues in this upcoming fiscal session and in my opinion, it would be too much of a risk even try to have parallel sessions going on at the same time, a fiscal and a regular session, because if it turns out not to be lawful, then certainly it would be challenged in court.

GREG HILBURN: Absolutely I think the Senate leadership believes it's legal to have a concurrent session, the house does not and the governor told me this week that he did not believe it to be legal, so I think, if it comes to that it will be following the regular session which of course begins Monday

SABLUDOWSKY: What a mess, what a mess. Thank you Greg



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