Louisiana’s Budget Crisis Empowers an Unusual Group

In the midst of its biggest fiscal disaster in decades, the state is a good place to watch the evolving roles of freshman lawmakers and veteran lobbyists.
by | July 2016

The calls started coming in to Rep. Stephen Dwight nearly every day after his election to the Louisiana House last year. Interest groups all across the political spectrum were eager to meet with the newly elected member. For Dwight, it was a bit bewildering. A 38-year-old Lake Charles lawyer, he had never held elected office before. Suddenly, as a member of the Republican majority on the House Ways and Means Committee, he was in the middle of the state’s most severe budget crisis in decades. “It was like drinking water from a fire hose,” he says. “Everything was coming at us.”

One of Dwight’s first-term Republican colleagues, Rep. Jack McFarland, had somewhat more preparation. He had done the budgeting for both his small north Louisiana parish and his timber business. But those budgets pale in comparison to what he’s dealing with as a new member of the House Appropriations Committee. “By the end of my first year in office,” he says, “I will have learned as much as most legislators do in three years.”

That’s the way it is in the Louisiana Legislature in 2016, a year in which fiscal disaster and term limits have combined to give crucial roles to an unusual number of new members. Meanwhile, there’s one other group whose influence is rising: the large corps of lobbyists who practice around the Capitol in Baton Rouge.

While the newly minted legislators have only started to learn the inner workings of the state legislature, many of the lobbyists have been around for decades. Their numbers have grown over the years as well. In a legislature loaded with newcomers, lobbyists are an important source of information not only about the interests they represent, but about the legislature itself. Getting acquainted with Dwight, McFarland and the large class of freshmen lawmakers has been a high priority for the lobbyists roaming the Capitol corridors this spring.

Lobbyists are key players in every state capitol, and they may be more important now than in the recent past, as national advocacy and business groups turn their attention away from a gridlocked Congress to focus on effecting change at the state level. Louisiana, in the midst of a fiscal crisis, is a good place to watch the evolving roles of lawmaker and lobbyist play themselves out. Broad-based tax cuts implemented by Republican Gov. Bobby Jindal, who left office last year, have contributed to a massive shortfall in the state’s revenue. The recent decline in oil prices, and the accompanying drop in oil severance taxes, have made the situation even worse. Shortly after taking office in January, Democratic Gov. John Bel Edwards called for a special session to close the state’s immediate budget gap. The regular session ended with the treasury still about $600 million short for the coming fiscal year, so Edwards called for a second special session in June.

Edwards floated a number of revenue-raising ideas, including income tax bracket changes that would effectively increase rates for middle- and upper-income households and reductions to corporate tax breaks. But the Republican-controlled House pushed back, and the second special session ended with lawmakers raising revenues less than half of Edwards' goal. The deficit for the current budget is projected to be as high as $200 million, raising the possibility of midyear cuts.

Every interest group in Louisiana has a stake in the outcome. “Whenever you’ve got a shortfall like this, all the special interests begin to surface,” says Senate President John Alario, with stacks of memos from groups all over Louisiana sitting on his desk. “Everybody wants to be heard and give their side of the story.”

Given the state’s dire fiscal situation, the lobbying firms around the capitol are mostly taking a defensive approach right now, trying to avoid introducing much controversial legislation. It’s important, lobbyists say, to manage clients’ expectations and let them know that under these circumstances, maintaining the status quo is a win.

Just under 700 lobbyists are registered to work with the state legislature, or nearly five for every lawmaker. That’s twice as many as in 1980, when there were 350. One big reason for the increase, lawmakers say, is the adoption of term limits. Louisiana is one of 15 states with term limits, prohibiting members from serving more than 12 consecutive years in either chamber. Lobbyists are now providing much of the institutional memory that term limits have otherwise erased.

This year’s freshman class is not only large -- 40 of the 144 members of both chambers -- it is exceptionally well-represented on the key committees. On House Appropriations, for example, McFarland is one of 10 freshmen out of a total of 25 members, an unprecedented number. This too is related to the fiscal situation. Faced with the prospect of making difficult budget cuts, House Speaker Taylor Barras found little interest from veteran lawmakers in the normally sought-after posts. At the same time, Barras wanted newer members to start gaining experience on the money committees, since well over a third of the chamber will be term-limited in 2019. “We need the bench to be capable of stepping in when we’re gone,” Barras says.

Given the importance of the new members, many lobbyists arranged not only to attend fundraisers for them, but also to visit them in their districts prior to the legislative session. “When you have a large batch of new legislators coming in, you don’t know what they’re going to do,” says Jeannie Bordelon, who heads the state association of lobbyists. “There are a lot more getting-to-know-you meetings going on.”

If there’s a dean of the Louisiana lobby corps, it’s Randy Haynie. As an independent contractor who has lobbied for 36 years, he knows the history of why bills were passed or amended, and is occasionally called to speak before committees on bills he isn’t even lobbying on. “I am now part educator, almost like a college professor,” he says. “When I first started, I was just a salesman.”

To help newer members, senior lawmakers and the legislature’s fiscal office convened a series of day-long crash course-style budget training sessions beginning in November. “Clearly, when you come in with a $900 million shortfall in the current year and $2 billion shortfall in the next year, it’s hard to wrap your head around if you’ve never been through a budget process,” says Speaker Pro Tem Walt Leger III, who participated in some of the sessions. In addition, each freshman legislator was assigned a mentor.

Sen. Sharon Hewitt, a first-term legislator who was placed on the Senate Finance Committee, says that making sense of all the moving parts of the budget has been the hardest part of her job. “It’s definitely more complicated than it appeared on the campaign trail,” she says. Like other new members, Hewitt, who had worked as an engineer, is still learning the three-letter acronyms that analysts throw out during committee hearings.

Haynie remembers the days when he wasn’t competing against any other lobbyists on many bills. Now, there are frequently more than a dozen lobby groups on either side of a single issue. Groups representing large industries or fields have splintered off, creating fights within fights. Scope-of-practice battles in the medical field are a good example. One current clash in the Louisiana Legislature pits nurses against doctors on the question of whether some nurses can practice if they’re not affiliated with physicians.

MultiState Associates Inc., a nationally focused government affairs company, links a recent uptick in lobbyist registrations across state legislatures to the policy gridlock in Washington. “We’re increasingly talking with D.C.-centric organizations that are taking a renewed interest in state government relations,” says Andy Trincia, a principal at the firm. Areas of growth include the health-care sector, financial services and emerging tech companies.

In Louisiana, while lobbying activity has proliferated over the longer term, annual lobbying expenditures reported to the state Ethics Administration have been mostly flat the past few years. Through the first four months of 2016, though, lobbying spending is up more than 50 percent over last year, due largely to the first special session that began in February.

As lawmakers have come and gone over the years, the major lobbying players haven’t changed all that much. The Louisiana Association of Business and Industry and the Louisiana Hospital Association continue to wield significant influence. Some of this is exerted behind the scenes, but some is on display right in the hallways. Organizations often hold a day of events at the Capitol or rent tables outside the chambers to make their presence known. One afternoon, the Louisiana Retailers Association served ice cream and snacks. The next day, the Louisiana Academy of Family Physicians offered health screenings and distributed back scratchers to members.

The major lobbying organizations have been providing lawmakers with polling data and specialized expertise that isn’t available within the legislature. When a House member proposed a bill intended to support autonomous vehicles that would have unintentionally impeded testing and development, Haynie flew in an executive from General Motors Corp. from Detroit to assist. They ended up completely rewriting the language and introduced a new bill.

Legislative staff are available to help with research and bill drafting, of course, but their time and resources are limited. Staff numbers have been dwindling in recent years all over the country. Across all 50 capitols, total state legislative staff has declined about 9 percent since 2003, according to statistics compiled by the National Conference of State Legislatures. Most Louisiana House members have one legislative aide to handle correspondence, but are otherwise on their own to request information.

Gregory Bowser, the Louisiana Chemical Association’s director of government affairs, thinks legislative staffing limitations have increased the need for lobbyists. “When you think about 2,000 bills that may be introduced and start talking about different areas,” he says, “lawmakers don’t have the expertise to really do it all and switch that quickly.”

Years ago, the Louisiana Association of Business and Industry didn’t do a lot of deep dives on policy or research. In 2013, the group hired a research director and has since started producing a series of reports and a daily email newsletter. Stephen Waguespack, who heads the association, says he’s ramped up information-gathering efforts, in part to fill a void he sees in the limited resources of legislative staff. “Generations ago, lobbying was more of who you knew and whether you could grab the right elbow in the hallway,” he says. “Now, it has absolutely got to be substance-based or you won’t pass the smell test here.”

While wining and dining still occurs in Louisiana, it’s less prevalent than it was a few decades ago, as is the case in virtually every state capital. Old Baton Rouge watering holes like the Green House and Capitol House Hotel restaurant are long gone. Lobbying that once would have taken place over a one-on-one dinner now typically is conducted at luncheons or in group settings. State ethics rules allow lobbyists to spend $60 on a legislator’s food and drink at a given event, but public officials in the state can’t accept any gifts of “economic value.” Lawmakers are further prohibited from accepting campaign contributions during regular sessions, although those rules didn’t apply to the two special sessions this year.

Perhaps no one has witnessed the evolution of lobbying over the years quite like Alario, the legislature’s longest-serving member, who at age 72 has spent 36 years in the House and eight in the Senate. “I’ve seen it go from individual house parties where people would cook in their homes and invite a bunch of legislators over,” he says. “With the new ethics laws, it has changed a lot.” Lobbyists also say that email and cellphones have reduced the need to meet with lawmakers as often as before.

Lobbyist Liz Mangham says lawmakers have less time than they did years ago, so she’ll generally try not to lobby more than two weeks in advance of a vote. She also tries to gauge the way one of her bills will be perceived by a lawmaker’s constituents. “You really have to give them the lay of the land so that they can make an educated guess,” she says. “Folks back home matter.”

Dwight, the freshman lawmaker, started to feel out the lobbyists over the course of the first special session. In sorting out who’s helpful and who’s not, he’s grouped them into two types: those able to talk about both sides of an issue, and those who approach it like a salesman. “You learn real quick which group they’re in,” he says.