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Hannah: LABI sounds off

It’s understandable why higher education officials in Louisiana are giddy these days.

The state House of Representatives approved some $650 million in new taxes last week, and the House Appropriations Committee on Monday signed off on House Bill 1, the primary appropriation bill for state government, including some $575 million for higher ed in the fiscal year that begins July 1.  The appropriation for the state’s colleges and universities represents roughly the same amount of money higher ed got from the state in the current fiscal year.

The anticipated spike in revenues for state government courtesy of the new taxes approved by the House would work two-fold: Offset a projected $1.6-billion budget shortfall heading into the 2015-2016 fiscal year and save higher ed from undergoing a 30 percent reduction in state funding.

SAM HANNASomething happened on the way to the dance, though, that gives us reason to believe the House’s handiwork was all for naught or unsustainable to say the least.  One shot across the bow came from the likeliest of sources while another volley was anticipated but wasn’t expected to surface until the music stopped.

C.B. Forgotston, a Tensas Parish native who has spent nearly a lifetime birddogging state government, rattled off a host of reasons in his blog about why the taxes approved by the House won’t hold water.

According to Forgotston, an attorney by trade, only five of the 10 tax hikes approved by the House received a two-thirds vote, which the state Constitution requires of any measure that raises taxes.  A court challenge would nullify the five tax increases in question, Forgotston wrote.

Forgotston also noted that one of the tax increases approved by the House would be effective only until 60 days after the 2016 regular legislative session.   Meanwhile, according to Forgotston, most of the taxes would expire or phase out some 18 months down the road.  Only one tax, generating some $86 million annually, would be levied permanently.

In other words, that load of new taxes the House ginned up last week represents a short-term fix for a structural problem that’s been years in the making.

Rest assured, however, that someone other than Forgotston is paying attention to the fine print in the tax bills the House catapulted to the Senate last Thursday.

That someone would be the Louisiana Association of Business & Industry, the state’s largest and most successful business lobby.  Ironically, LABI’s president these days is Stephen Waguespack, whose most recent employer was Gov. Bobby Jindal.  Waguespack served as Jindal’s chief of staff after he spent a spell as Jindal’s executive counsel.  Adding more intrigue to the landscape was Jindal’s pledge to veto the entire budget if the House-passed tax increases were part of the package.

So it wasn’t a complete surprise earlier this week when Waguespack aired out LABI’s concerns about the taxes that passed the House. He described them as the largest tax hike in a single day in the history of Louisiana.

It’s understandable why LABI is upset with the revenue measures that sailed through the House at warp speed.  Most of them will hit the business community, which means every workingman and workingwoman in Louisiana will pay as well.  That’s the little secret about raising taxes that few people who make a living working for government never seem to understand.  That is, businesses will pass along to consumers any increased cost of doing business.  It’s that simple.

Yet, let’s give it to the House for giving it the old college try.  Let’s face it.  Someone had to do something even if that something was as misguided as raising $650 million in new taxes void of little debate.

But now our attention should turn to the Senate where that pot of money created by the House is expected to receive a warm welcome.  At least that’s what was expected before LABI cleared its throat.

Sam Hanna is a state political writer.

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