Hannah: SAVE scheme is asinine at best

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We’re at that point in the legislative session when things get a bit hairy.

The fiscal-only session of the Legislature must adjourn sine die by next Wednesday, no later than 6 p.m.  There’s no agreement on the budget, and it’s entirely possible lawmakers will approve a budget that doesn’t jive with Gov. Bobby Jindal’s “red line” on no net increase in taxes.  Jindal would veto it, setting the stage for a special session just as spring rolls into summer and the weather gets hot.  Tempers would be on the rise, too.

Meanwhile, it would appear the House of Representatives and the Senate have engaged in a game of chicken.

Rep. Joel Robideaux, chairman of the tax-writing committee in the House, better known as the Ways and Means Committee, is holding up a key component to help finance state government in the 2015-2016 fiscal year, which begins July 1.  Robideaux put the brakes on Senate Bill 284, otherwise known as the vehicle to create the SAVE fund.  He’s apparently holding up the legislation because the Senate Finance Committee, chaired by Sen. Jack Donahue, hasn’t moved on some tax measures already approved by the House.  And it seems there are some legitimate questions surrounding the necessity to create the SAVE fund in the first place.

Allow me the opportunity to attempt to explain what the SAVE fund is and why we’re told its needed.  But first, some background information is necessary.

Thus far in this legislative session, lawmakers have approved more than $600 million in new taxes, including a spike in the cigarette tax as well as some rollbacks in the tax breaks the state awards to the business community.  In order for the new taxes to pass muster with Jindal’s demand that lawmakers not approve any net increase in taxes, there must be some offsets.  Those offsets must arise from cuts in spending or rebates or credits for taxpayers.

SAM HANNAIt’s important to remember Jindal signed a no new taxes pledge with the anti-tax organization Americans for Tax Reform (ATR) some 12 years ago when he was a candidate for governor the first time around.  ATR is the brainchild of Grover Norquist, who, like him or not, is influential among fiscal conservatives throughout the country.

Remember, too, that Jindal has all but officially announced he will seek the Republican nomination for the 2016 presidential race.

Senate Bill 284, which would create the SAVE fund, would allow the state’s colleges and universities to impose a $1,500 fee on each student.  There are more than 220,000 students enrolled in Louisiana’s colleges and universities.

Students wouldn’t actually pay the $1,500 fee.  Instead, they would be handed a tax credit voucher for $1,500 to supposedly offset the “phantom” fee.  Students would then sign over the $1,500 voucher to the state Board of Regents, which oversees Louisiana’s colleges and universities.  The Board of Regents would then turn to the state Department of Revenue and cash in the vouchers for revenues to help operate the colleges and universities in the next fiscal year.  Supposedly we’re talking about some $350 million in revenues for higher education.   Not exactly chump change, particularly in light of the $400 million in cuts in state funding the higher education community was facing at onset of the fiscal-only session.

The SAVE fund, including the convoluted manner in which it would operate, would give Jindal some cover in the eyes of Norquist.  In other words, Jindal could stomach some of the tax hikes as long as the state “rebated” money to taxpayers.  That’s where $1,500 vouchers come into play.

Confused?

The SAVE fund scheme, or whatever you want to call it, would gin up much-needed revenues for higher education.  It’s asinine, however, to create a program, or vehicle, whose purpose could be achieved by much simpler means.  There’s simply no need for it, except to satisfy a man who works in Washington, D.C. and fancies himself as some sort of a crusader for the American taxpayer.

But that’s where we are in Louisiana in an election year with lawmakers seeking re-election or and a term-limited governor with his mind on other matters.

Sam Hanna is a state political writer.