Monday, March 14, 2016

There's no crying in budgetball

On the final day of the 2016 Special Session To Save The World Or At Least The Budget, the Louisiana Legislature tried to play beat the clock. The clock won.
Frazzled and tearing up, Alario publicly apologized on the Senate floor for trying to jam through too many pieces of legislation in the final minutes of a 25-day session.

"I want to apologize to you for what happened here tonight," Alario said into the microphone as the Legislature's 6 p.m. adjournment deadline passed. "That's not the way to conduct the people's business."

Alario isn't just any legislator. He is the longest-serving member of the statehouse and widely considered the most effective. He's in his second term as Senate president after serving two terms as House speaker.

And it wasn't just a last-day emotional release; he appeared frustrated for much of the session. In earlier interviews, he said he had never encountered such difficulty trying to negotiate a deal as he had with House Republicans this year.

"It's starting to look almost like a bit of Washington style, where people are taking sides and not willing to compromise," Alario said Wednesday. "That's not what Democracy ought to be about." 
Actually, "beat the clock" is wrong. They weren't playing against the clock. They were playing against each other.  Who won that is a little more difficult to say given how limited the boundaries were. The immediacy of the current year shortfall combined with the recalcitrance of the Republicans in the House limited revenue raising options to the most regressive of means. Only sales taxes were up for discussion.  The fight, then, really came down to a matter of who pays them.
Exemptions were a key issue of conflict in negotiations between legislators because businesses and industry in particular benefit from not having to pay sales taxes on a variety of materials and manufacturing and construction equipment.

Business lobbyists, with considerable political sway, fought to keep these exemptions in place, which is why the final hours of the session came down to a debate between hiking the sales tax beyond just a penny increase or wiping clean more exemptions to raise more money.
This argument between the LABI faction and what I guess we can call the Governor's side became so stupid and petty that the summary of the bill  as reported out of conference appeared to indicate that an additional .25 of a penny had been added at the last minute.
It was Sen. Karen Carter Peterson, D-New Orleans, who first raised the issue as time ticked down. Many legislators harbor a deep dislike of conference reports, especially those passed in the waning minutes of a session, because the reports are the perfect vehicle for sneaking in items of dubious value.

Because of this, and perhaps due to a growing distrust between the House and the Senate that unfolded over the special session, some senators were wondering whether they had been hoodwinked.

"There's a conference report that has an increase of 1.25, not 1 -- are you sure?" Peterson said.

"Double check that," said state Sen. J.P. Morrell, D-New Orleans.

"I have two texts from people. We trusted what was said and what was presented," Peterson said. "If that's not what was in the bill, I'm hoping -- I pray to God -- this place will be blown up. If the House is listening, don't pass House Bill 62. Vote no on House Bill 62."

There was a pause as Morrell and others double-checked the bill. Upon finding the 1.25 percent increase as listed in the digest, Morrell moved to reconsider the vote on the sales tax bill -- a legislative maneuver that had the potential to erase the vote of the Senate on the bill.
Everyone is calling that a "typo." But it's entirely possible someone was just trolling at that point. It's not like the LABI Republicans were taking their charge to plug the budget hole all that seriously in the first place. Otherwise they probably wouldn't have, you know,  failed at that..
Tax bills were rushed through in such frenzy in the final minutes of the special legislative session that the governor, lawmakers and their financial advisers were still trying Thursday to sift through the implications.

This year’s budget could be out of balance anywhere from $30 million to more than $50 million. But that figure remained unclear as the Legislature’s fiscal analysts tallied up estimates of how much the sales tax increases passed in the session’s closing minutes would raise.

“It’s hard for us to get a real fix on what the shortfall will be,” Senate Finance Chairman Eric LaFleur, D-Ville Platte, said even as he asked lawmakers to support the final budget rebalancing bill Wednesday evening
In the wake of this fiasco, there are lists being passed around of the Republican legislators who voted NO to everything.  Here's one I made myself because I think it gets to the heart of the problem.  This is everybody who voted yes to raising the one penny sales tax but then no to the bill that struck out the various special privileges and exemptions.  Think of this as the Maximum Regressivity Caucus. Or, if you like, The Dirty Penny Club.

Dirty penny club

With these guys running around loose, maybe the session was doomed to fail no matter what.  But we did try to warn people that the strategy employed by the Governor's faction could get problematic.

Believe it or not, the seeming chaos on the last day of the session wasn't an accident.  It was the end both sides not only saw coming but were playing for the entire time. The thinking on the Governor's part was he could just sit back and let the Republicans spend the whole session complaining until, in the final hours, whatever half finished work there was would go to some back room where Wise Old Man John Alario would fix everything. Clancy DuBos called it "Come to Papa."
As the clock ticks down to the final hours, all eyes will be on Senate President John Alario, R-Westwego, the dean of the Legislature. Alario knows this process better than anyone. He is the master of the conference committee and a deft hand at forging compromise.

As the House anguishes over every detail of every tax measure and every spending bill, Alario sits patiently in the Senate, knowing he may be called upon to sort things out. I can almost hear him whispering to his House counterparts, “Come to Papa.”
As we said at the time, though, this was a risky way to play things given that the Republicans (with help from New Orleans Democrat Neil Abramson) had prevented the Governor from installing a friendly Speaker of the House back in January. This should have signaled then and there that the LABI faction might not go quietly to Papa when the time came.  As it happened, the scene ended up with Papa in tears.

Hopefully next time the strategy will be more aggressive. There will, of course, be a next time. Thanks to the failure, there will certainly have to be second special session to finish this fiscal work in June. But for now, as the regular session begins, Alario is ready to hug it all out
Lawmakers have to contend with such a large shortfall because they couldn't agree on a strategy for closing the budget gap before the special session ended. The protracted standoff in the Legislature over the spending cuts and taxes during the special session frayed some relationships. Senate President John Alario, R-Westwego, even accused House leaders of "playing games," though he said he is ready to put the disagreements behind him.

"Let's give each other a hug and move on," he said.
Maybe if they squeeze each other hard enough, a few more clean pennies will fall out before the year ends.

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