Edwards: House Action Hasn't Done Enough To Close Budget Gap

BATON ROUGE (AP) — The Louisiana House's action to rebalance this year's budget hasn't "come close to fixing the problem," Gov. John Bel Edwards said Friday.

         The Democratic governor said while he appreciates the House tax votes so far, the majority Republican chamber has passed an "inadequate" mix of cuts and taxes to fully close the remaining shortfall for the budget that ends June 30.

         His comments were echoed by Senate President John Alario, R-Westwego, who said more money is needed to avoid damaging cuts to public health care services and colleges.

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         "They haven't given us revenue measures yet. My estimate is they're a couple hundred million dollars short," Alario said.

         A special legislative session called by the governor to close gaps in this year's budget and to work on shrinking holes in next year's spending plans has passed its midpoint, with no agreements yet reached on the favored combination of cuts and tax hikes.

         Lawmakers and the governor have agreed on nearly $390 million in short-term financial patches and agency reductions for this year, leaving a gap estimated to top $500 million.

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         The House backed a package of $107 million in cuts and proposed to raise an estimated $290 million in new taxes for the remaining four months of the budget year. But that wouldn't be enough to rebalance the budget.

         Meanwhile, questions have been raised about the depth of the K-12 education cuts and the workability of the central tax hike approved by the House. Edwards and Senate leaders said the 18-month expiration date added to a proposed 1-cent state sales tax hike is unrealistic.

         The House-passed bill would boost Louisiana's 4-cent sales tax by another penny on every dollar spent, starting April 1. It's estimated to raise more than $200 million for this year's budget and nearly $900 million for a full year, but it's set to expire in October 2017.

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         Edwards wants the sales tax to remain in place until lawmakers revamp Louisiana's tax structure more broadly. He said 18 months doesn't give lawmakers enough time.

         Alario and Sen. J.P. Morrell, who chairs the Senate tax committee, said the flaws of the expiration date are more basic than that. They said for revenue to be usable for Louisiana's operating budget, it has to be available for three years or more.

         An 18-month sales tax doesn't meet the criteria.

         "We can't even use it to balance the budget," said Morrell, D-New Orleans. "Procedurally and legally, it's a useless tax."

         House Speaker Taylor Barras, R-Baton Rouge, said the expiration date was "pretty overwhelmingly accepted" by lawmakers in the House as part of a compromise over cuts and taxes. He said he didn't know how much wiggle room there would be to change it.

         The Senate, constrained because most tax bills must begin in the House, starts sifting through the House-passed tax bills on Sunday. The House plans to consider additional tax measures next week, after agreeing Friday to a telephone tax renewal and other proposals.

         Barras acknowledged the House "may still be slightly short" of what is needed for this year's budget. He said House lawmakers were interested in proposals that would raise money by removing many of the business exemptions on part of the state's existing sales tax.

         He doesn't see more ways to cut spending in the short-term to help balance the budget.

         "The cuts that we recommended in the (budget) bill yesterday we feel are as deep as we could go without truly affecting the functionality" of government, Barras said.

         The session must end March 9. Speculation has started about whether lawmakers may need to hold another special session to finish their budget work. While the Legislature has a three-month regular session beginning March 14, they can't consider taxes in it.

         Edwards wasn't enthusiastic about talk of another special session.

         "The solutions aren't going to be any different or any better later this year," the governor said. "We're much better off doing our work now without coming back later."

         – by AP Reporter Melinda Deslatte



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