Former representative criticizes Jindal
BY MICHELLE MILLHOLLON
Capitol news bureau
July 04, 2012
The legislative sponsor of a controversial tax plan told the Press Club of Baton Rouge on Monday that state government could get a handle on its budget by looking at tax exemptions that benefit individuals and corporations while diverting state revenue.
“We’re giving away the store,” former state Rep. Vic Stelly said.
From state spending to a political history lesson to his opinion on Gov. Bobby Jindal’s job performance, Stelly touched on a number of topics during an hour-long appearance. He made the trip from Lake Charles to downtown Baton Rouge just two weeks after announcing his resignation from the Board of Regents. Stelly said he grew discouraged with higher education funding cuts and back-to-back tuition hikes under the Jindal administration.
He characterized the first five years of Jindal’s tenure as governor Monday as “very self serving.”
Stelly said the governor’s “so-called reforms,” such as the push to give vouchers to increase the number of children educated in public schools, will play out for years before an assessment can be made on whether they worked.
The governor’s spokesman, Kyle Plotkin, defended Jindal’s record, saying the governor lowered taxes and revamped workforce development to create more jobs in Louisiana.
Stelly said the reforms resonate with people outside Louisiana who think Jindal might be great vice president material.
“What do they know?” Stelly said.
Jindal dodged questions over the weekend on “Meet the Press” about whether he is interested in becoming Republican presidential hopeful Mitt Romney’s running mate.
“We’re not going to speculate. I’ve said this for the last several weeks. We’re not speculating,” Jindal said.
The governor’s flirtation with national politics comes as the state grapples with financial problems.
Ten years ago, voters approved a tax swap that Stelly sponsored while representing the Lake Charles area in the Louisiana Legislature.
The swap repealed the state sales tax on groceries and utilities in exchange for shifting some into higher tax brackets to offset the loss of sales tax revenue. Another part of the Stelly plan included a repeal of the state deduction for federal excess itemized deductions on expenses such as mortgage interest, charitable contributions and medical costs.
In 2007, the Louisiana Legislature began making changes to the Stelly plan tax swap, while keeping the repeal of the state sales tax on groceries and utilities.
The first step was to gradually reinstate the state deduction for federal excess itemized deductions for the 20 percent of Louisiana tax filers who claim them.
A year later, the Jindal administration initially resisted a push in the Legislature to return state tax rates to pre-Stelly levels. Once the momentum to make the change became evident, Jindal embraced it and even took ownership, proclaiming it the largest tax cut in Louisiana’s history.
Not long afterward, the state’s fortunes dipped, prompting a series of budget cuts.
“Circumstantial evidence would have to say the repeal of the Stelly plan ... started us downhill,” Stelly said.
Stelly passed out a chart showing a more than $2 billion reduction in state revenue over five years because of the repeals. At the same time, state government is struggling to pay for basic public services.
Stelly said the only thing he would have changed about his plan would have been to embed it in the state constitution. Even then, Stelly said, it probably would have been repealed.
“What will happen with the state budget? I don’t know. I’m kind of despondent right now,” Stelly said.
He said one step the state could take would be to do something about state tax exemptions that divert billions of dollars in revenue.
A commission of legislators is supposed to start studying the exemptions soon.
“Hopefully, the commission will do something more than study and throw it in the closet,” Stelly said.