By MARK BALLARD
Advocate Capitol News Bureau
Published: Jul 21, 2007 - Page: 1A

Among the 13 vetoes Gov. Kathleen Blanco released Friday were bills that would have provided nearly $1 billion in tax relief, including a deduction for parents who send their children to private schools.

Going into an election year, legislators passed dozens of tax breaks. These were the first tax breaks she rejected. Most she signed into law, and they go into effect in 2008.

Friday, Blanco killed legislation, including some sponsored by her closest legislative allies, seeking tax credits and tax deductions that fiscal officers calculated would have cut state revenues by $966 million, perhaps more, over the next five years.

With the vetoes, the governor finished acting on all the measures passed by the Legislature during its annual session, which ended June 28. Blanco then flew to a Michigan resort for a meeting of governors.

In her veto message, Blanco wrote that Senate Bill 45 could “subsidize private schools at the expense of public school children.”

About 128,400 students attend private and parochial schools in Louisiana while another 650,000 students go to public schools, according to the state Department of Education.

State Sen. Rob Marionneaux, D-Grosse Tete, said he accepted a number of changes that watered down his SB45 in hopes of overcoming Blanco’s objections. “She didn’t and I’m not happy about it,” Marionneaux said Friday.

SB45 would have allowed parents to take an income tax deduction for 50 percent of private and parochial school tuition and fee costs, up to a maximum $5,000, starting July 1.

Rep. Hunter Greene, R-Baton Rouge, said many parents choose to educate their children in private schools because of their concerns about the quality of the public school system. At the same time they are paying taxes to support public schools.

“It is certainly not a rich person’s tax cut. It’s a modest deduction for everyday people,” Greene said Friday.

The Rev. William Maestri, spokesman for the Archdiocese of New Orleans, which runs a large number of Catholic schools, said in a prepared statement: “This veto clearly indicates that Gov. Blanco is acting on behalf of teachers’ unions and teachers’ organizations rather than on behalf of parents and students.”

The head of one of the largest unions, Steve Monaghan of the Louisiana Federation of Teachers countered that SB45 was the first step toward “school vouchers,” a politically divisive idea in which taxpayers help fund private schools.

“It was never debated as educational value, only as a tax justice issue,” Monaghan said Friday. “This was a voucher placed in more a palatable wrapper.”

Blanco also vetoed House Bill 892 by Rep. Taylor Townsend, D-Natchitoches, which would have extended the Capital Tax Credit Program that provides state tax credits for investment companies combined with a tax reduction for insurance companies.

“The measure perpetuates a very expensive way for the state to provide risk capital to Louisiana businesses because for the maximum leverage for every dollar of CAPCO investment the state gives a 90 percent tax credit, thus taking the risk out of the risk capital,” Blanco wrote in her veto message.

Townsend, who as chairman of the House Ways and Means Committee is one of Blanco’s floor leaders, said Friday he had been given no indication that the bill was in trouble. He disagreed with Blanco’s analysis.

Another bill vetoed was House Bill 975 that would have given up to $3,000 sales tax refunds.

The money would come from sales taxes spent on storm-damaged property repairs and replacements for those living in hurricane-affected parishes.

In her veto message, Blanco said many people already received refunds of $2,000 from a state law that grants sales tax relief to those living in presidentially declared disaster areas.

Blanco also vetoed House Bill 505, which included a tax exemption to offset high energy prices, which was sought by the Louisiana Chemical Association.

“Not only does this exemption create a significant revenue loss for the state, but the Department of Revenue has informed me that portions of the bill are internally inconsistent,” Blanco wrote.

She also rejected House Bill 870 by Rep. Gil Pinac, D-Crowley, which would have created a program to provide a 100 percent tax credit for investments made by certified hurricane recovery capital companies.

Blanco said the state through the Louisiana Recovery Authority is targeting the same type of businesses. She also said the legislation would result in a state general fund decrease of $81 million.

Jordan Blum and Marsha Shuler of the Capitol news bureau contributed to this report.

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