Spinning in Circles: House Bills Move, But Is It Forward Motion?

With all the “spin”, circular logic, and going right back to the starting point of the fiscal cliff, it certainly seemed circles were the theme in House committees Sunday. Distaste for the overall agreement to advance Democrat-supported revenue-raising bills and Republican-supported Medicaid program-tightening bills to the House was evident on both sides. Tension was high at the start, as House Ways and Means began with HB 8, Speaker Pro Tem Walt Leger’s (D-New Orleans) bill to cut the allowable state claim for federal itemized deductions in half. Through clenched teeth, he added an amendment that keeps the full federal allowance, with the exception of removing only the claim for income and sales taxes paid in the previous year. That would dramatically reduce the amount of revenue it would add from the original $89-million estimate annually, yet there was no discussion of a new fiscal note for the revised bill. Representative Alan Seabaugh added an amendment chaining the bill to others (all pass or all fail). Yet when it came time to move the vote forward, Seabaugh objected. “I have a philosophical problem with the bill,” the Shreveport Republican stated. “Why the urgency? Federal tax reform means the state will be collecting more. The price of oil is going up. This so-called ‘fiscal cliff’ the governor talks about talks about may not be there, after all.” Leger simply replied, “The fiscal cliff is real. As for this bill, I can’t say it’s what I hoped, but it is a step. I hope you’ll move it to the House floor.” On a 10-7 vote, they did. Next up was the sales tax measure: HB 23, by Representative Stephen Dwight (R-Lake Charles). It renews a quarter-cent of the expiring fifth penny of sales tax, and cleans exemptions from the other four pennies. It was chained to the other bills, as well. That’s when the trajectory of the forward movement becan to curve back on itself. Seabaugh proposed another amendment, to make the changes temporary, yet again. “Making them permanent means we’ve failed at tax reform,” Seabaugh declared. Despite fellow Republican Chris Broadwater reminding him, “Temporary taxes make the credit rating agencies and businesses nervous,” Seabaugh pressed the motion to only extend the sales tax changes for 36-months – to June 30, 2021. That passed 10-7, followed by a 12-5 vote to move the bill to the House floor. The other revenue-raising measures advanced on similar votes, with similar objections raised. The entire exercise prompted Republican Barry Ivey to say, “We are kicking the can down the road – again. This is not positive reform. It’s slicing and dicing, since we legislators don’t do anything before we absolutely have to. Business lobbyists want to obstruct reform efforts, and while I have always been pro-business, today I am standing up for the people.” He voted against advancing every one of the bills. The other components in the compromise package were heard in House Health and Welfare Committee. The strongest pressure revolved around HB 3, which would institute a work component for Medicaid. Many House Democrats deeply dislike the subtextual message of the bill, which some opponents referred to as the “welfare queen mentality”, or what New Orleans Representative Helena Moreno said is “promoting false stereotypes”. Dawn Starns with the National Federation of Independent Businesses got caught in the whirlpool of those committee members’ distaste for the bill when she came to the witness table in support of the measure. “NFIB supports reforms to the Medicaid program, because we don’t want the program to crumble under its own weight,” she stated. “What type of reforms do you recommend?” asked Dustin Miller (D-Opelousas). “Y’all are here to do that work, and we are certainly not the experts on the Medicaid program,” she responded. “Just like small business doesn’t want you all coming in telling us how to run things, we don’t want to tell you that. But what we do know is that the cost of the program is going to go up over time, and that the state faces a budget problem. And we know when we face a budget problem, y’all come to us and look for tax increases.” “So where does this bill save money?” Miller wondered. “We believe it will save money over time.,” Starns replied. Monroe Representative Katrina Jackson had questions for Starns, as well. “You’re here supporting this. What benefit does your organization get out of this legislation? “ Jackson asked. “Since the ACA passed and Medicaid expansion, it’s been an undue burden on our members,” was the response. “Our members call and say they can’t keep their business afloat because insurance premiums have skyrocketed due to the ACA. Most small business owners can’t afford that, so they’d be reducing the number that they employ, cut back hours, that sort of thing.” “You’re saying right now some of your members are reducing their workforce size so that they can provide insurance? Your businesses have laid people off, because they couldn’t afford the cost of doing business?” Jackson asked, incredulously. “So now you’re here, supporting a bill that’s going to make say make more people join the workforce, but you’re saying your businesses have reduced their workforce. Are they going to be able to offer them jobs?” “You have a lot of changes happening. You have tax reform happening at the federal level, though in this state, unfortunately, we are going to see a tax increase at the state level,” Starns lamented. “And so that tax reform doesn’t help you, is that what you’re saying?” “Well, it doesn’t help us to the extent that it’s helping others,” Starns said, her voice becoming more shrill. “Other states are seeing a much bigger boom from it.” At this point Jackson, an attorney, was getting fed up with the non-responsive answers. “I’m going to ask the complete question, okay? So I want you to listen. Your testimony today is that some of your member businesses have had to reduce their workforce. Are you telling me they’re going to increase their workforce to allow these people to work?” “We represent 4000 Louisiana small business owners,” Starns replied, “And I don’t have those numbers with me.” “Are they’re going to be able to employ these new people?” Jackson pressed. “I get that you don’t like the bill,” Starns snapped back. “It’s not about liking the bill,” Jackson said with a sigh. “When we encourage people to work, are your businesses going to be able to employ them?” “Our members are telling us that access to a qualified workforce is their biggest challenge, now that federal tax reform has been dealt with,” Starns replied. “Does the federal tax bill allow you to increase your workforce? “ Jackson asked, trying to get a straight answer, instead of deflections. “Some will,” Starns said. “Some will increase the size of their building. Some will increase wages. They have a myriad of opportunities.” “You just don’t have an answer whether you will increase your workforce, based on that legislation, right?” “I don’t know how many times you’re going to want me to answer the same question,” Starns retorted. “I don’t know how many times I’m going to have to ask the question before you’re going to provide an answer,” Jackson responded. “I probably shouldn’t take anymore questions,” said Starns. “You’re welcome to leave the table,” Jackson agreed. (Afterward, Representative Jackson tweeted a request to meet with NFIB’s executive board, saying, “I find disrespect a hindrance to ever working together.” NFIB responded, “Happy to accommodate your request.”) But back to the bill…it was amended to prohibit taking away anyone’s Medicaid benefits, and ultimately advanced to the full House on a 9-6 vote. HB 2, permitting Legislative Auditor access to state tax records in order to verify Medicaid eligibility, also advanced. When the full House convened afterward, they punted consideration of any of the bills till Monday morning. The Senate, which convened a bit later, was left with nothing to do but wait on the House some more. Meanwhile, chairman of the Senate’s Revenue and Fiscal Affairs Committee, J.P. Morrell, made his opinion of the”temporary sales tax” amendment clear. “I’m not in support of temporary solutions to ongoing problems,” Morrell said. “This is how we got into this situation in the first place.”