La. Legislature deadlocks over Gov. Blanco’s spending plan

BATON ROUGE, La. (AP) _ Gov. Kathleen Blanco’s administration couldn’t break an impasse with Republican lawmakers Wednesday over her push to raise state spending limits and free up an unexpected a windfall in tax revenue fueled largely by hurricane recovery.

GOP lawmakers in the House voted nearly as a bloc again Wednesday against a boost in spending limits, essentially stalling Blanco’s push for state employee and teacher pay raises, road repairs, health care, money to attract a steel mill and other items _ even after Democrats offered changes.

The deadlock left few options for the Democratic governor as the special legislative session she called passed its midpoint. The session must end by Sunday.

Blanco acknowledged she wouldn’t win the battle with Republicans.

“I today don’t see a way to break through,” she said.

However, the governor praised the House for passing three items she sought: a child tax credit for parents, a refundable tax credit for some of the higher insurance costs caused by the hurricanes, and the creation of a fund to dole out money to attract the steel mill.

“We’re going to finish this session. We’re going to get some very positive things accomplished,” Blanco said.

Rep. John Alario, who was handling the spending plans for the governor, tried to broker a compromise with Republicans but couldn’t break the impasse.

“I’m sorry we couldn’t work out an agreement. We’ve tried different ways, never really got a counteroffer. Even when you buy a car, you get that. But we never had an opportunity to discuss it. But I don’t want us to leave here being mad at each other,” said Alario, D-Westwego.

Democrats and Blanco’s allies have stalled most of the Republican-backed tax breaks the governor initially sought. GOP lawmakers said the bills to give tax breaks to businesses and some individuals were being “held hostage” in retaliation because they refused to change the spending cap.

“Let’s get something done in this session,” said Rep. Mike Powell, R-Shreveport.

A child tax credit for parents, the insurance tax credit bill, and the extension of a tax break for steel mills were the only tax breaks to get approval from the House. The House adjourned until Friday, when leaders said they hoped to come in and wrap up the special session early.

Blanco called GOP leaders obstructionists who were ignoring the benefits of her spending package.

“It’s just the most amazing thing I’ve ever seen a group of people do. They’re going against their own people,” she said. “They’ve talked themselves into a corner and they can’t get themselves out.”

Republicans have refused to compromise on boosting the spending limit. Without a change, the state is limited to spending only $194 million more this year, and Blanco’s budget proposals initially topped $2 billion. Changing the cap requires a two-thirds vote, and Republicans make up more than a third of the House so they can stall the legislation.

“At this time we are still unwilling to break the cap,” said Rep. Jim Tucker, R-Terrytown, head of the House Republican Caucus.

The ongoing debate over spending involves $1.6 billion in unbudgeted dollars this year and an expected $827 million surplus from last year because of boosts in state taxes in the post-hurricane recovery and with a continuing rise in oil and gas prices.

Blanco called the session to spend much of the cash, but many lawmakers pressed her to delay, saying she was trying to spend too much money, with too little planning and discussion with the Legislature.

Republicans also said they didn’t want to approve spending for items that would cost the state year after year when they were uncertain about the state’s finances after hurricanes Katrina and Rita.

Tucker said the GOP caucus wanted to work on tax break proposals, and before leaving for the night Tuesday, the House approved a bill that would give a child tax credit for parents _ a bill backed by Blanco.

Rep. John Alario, who is handling the Blanco spending bills, said the administration might proceed with a few other tax credit bills, including one to provide a tax credit to homeowners who paid higher insurance rates because of the Louisiana Citizens Property Insurance Corp.

But that would leave many of Blanco’s session plans on the cutting room floor.

A particular complaint from Democrats, including Blanco, was that Republican lawmakers were ruining economic development initiatives by refusing to even lift the spending cap to provide $300 million to lure German company ThyssenKrupp Steel AG to a site along the Mississippi River between Baton Rouge and New Orleans. Arkansas and Alabama also are bidding for the project.

If the incentives don’t go through for the steel mill deal, “the blame will be squarely in their laps,” Blanco said.

ThyssenKrupp representatives were coming to Baton Rouge later this week to continue negotiations on the steel mill, according to the governor. Republican lawmakers said the state could find dollars within its existing $26.7 billion budget for the steel mill.