Gov. Bobby Jindal threatened to veto any attempts to delay a planned tax break for middle- and upper-income taxpayers, but he said he was working with senators on other ways to stave off some proposed college budget cuts.
Among the ideas offered by senators, Jindal said Tuesday, is a budget maneuver that would use money from the state’s “rainy day” fund for higher education and replenish the fund with dollars from a planned tax amnesty program.
The governor stressed that he wasn’t yet committed to the idea, instead saying he was considering it but also wanted higher education leaders to devise long-term plans for shrinking their spending as the state faces several years of projected worsening budget shortfalls.
“This is one more option that has been brought to us that we’re willing to listen to,” Jindal said of the rainy day fund proposal.
Senate leaders say they want to reverse at least half the $220 million in cuts Jindal proposed for higher education in the new budget year that begins July 1. The House backed a plan that would offset about $100 million of the cuts, with $30 million in tuition increases, money from an expired insurance fund and $50 million in proceeds from the tax amnesty program.
Higher education leaders said the tuition increases only will cover their inflationary and mandated increases in health care, retirement and salaries, not address the cuts. And they said they couldn’t budget for the tax amnesty money because it was unclear how or when they would receive it.
The use of the rainy day fund money could help alleviate the timing concerns of the tax amnesty money, though Jindal said the details of how it could work still were being worked out.
A proposal that has gained traction in the Senate would delay a planned tax cut for those taxpayers who itemize charitable donations, home mortgage interest and certain medical costs on their state tax forms. The full Senate will debate the measure, which has the backing of Senate President Joel Chaisson, D-Destrehan, and a bipartisan group of Senate leaders.
The senators want to use the $118 million generated by stalling the tax break to stop cuts planned for higher education.
But Jindal said Tuesday he’ll veto the measure if it reaches his desk. House Speaker Jim Tucker, R-Terrytown, also said it would be difficult for the plan to get House backing.
“I don’t think raising taxes or delaying tax cuts is the right solution to our problems,” the governor said.
Jindal said state government will have to shrink its size to cope with years of smaller revenues, and he said he’ll only support using stopgap pools of funding for higher education if the colleges have plans to scale back their spending in later years.
College leaders have been working on ways to restructure and reduce their costs, but Commissioner of Higher Education Sally Clausen said schools needed more time to make adjustments in a thoughtful way.
The governor opposes using the rainy day fund next year to stop budget cuts, saying the state will need those dollars when the money woes get worse. But the proposal under discussion with legislators wouldn’t deplete the fund because the dollars would be replenished by the tax amnesty proceeds.—-Contact The Daily Reveille news staff at [email protected]