Jindal budget expected to include $200M cut to higher ed, $526M less spending on tax credits
Gov. Bobby Jindal’s administration is presenting at the Capitol this morning a budget that scales back spending on tax credits and offers lawmakers a package of fee hikes and money-generating ideas that could keep Louisiana’s colleges from facing deep, damaging cuts that had been forecast next year.
“Our goal is to protect higher education and get down to no cuts,” Jindal Chief of Staff Kyle Plotkin tells The Associated Press, which received a preview Thursday of the governor’s recommendations for closing a $1.6 billion gap in the fiscal year that begins July 1. The budget is being presented to the Legislature’s joint budget committee this morning. See the official budget presentation.
To help close the shortfall, Jindal proposes to spend $526 million less on refundable tax credits, through which the state often pays out more than the taxes a person or business owes. The governor wants to rework 12 tax credits so the state doesn’t pay more than the tax liability.
The savings would be split, with $154 million going to health care and the remaining $372 million going to higher education, according to Commissioner of Administration Kristy Nichols, the governor’s top budget adviser.
Tax credits that would be capped include those for wind and solar systems, research and development projects, musical and theatrical projects, sugarcane trailer conversions, milk producers, historic residential rehabilitations and vehicles conversions to alternative fuels.
The priciest tax credit on the list for scale-back is the inventory tax credit, a more than $400 million tax break through which businesses receive a refund for payments of certain property taxes assessed by parish governments. Attempts to curtail that spending could face pushback from businesses.
“Whether or not we want to subsidize corporations who don’t have a tax liability versus prioritize higher education and health care, that’s the choices we have to make,” Nichols said.
Even with the cap on those tax credits, the governor’s budget proposal still contains $200 million in cuts to colleges. But Jindal will offer lawmakers a list of suggested ways to close most of that gap without a net increase in state taxes.
The Associated Press has the full story.