BATON ROUGE (AP) — Lawmakers in the Louisiana House are weighing whether to boost taxes on shoppers, smokers, drinkers, phone service and more as they look for ways to end the boom-and-bust cycles of the state budget.
After days of closed-door negotiations, the House on Thursday was scheduled to debate more than 30 tax proposals aimed at raising new cash for state government operations.
The short-term problems are acute: Louisiana has a budget gap estimated at around $900 million that needs to be closed by June 30. Public colleges, health care programs and social services are threatened with deep reductions if new dollars aren't plugged into the hole.
Next year's budget shortfall is even worse, estimated to top $2 billion.
Gov. John Bel Edwards is proposing to raise more than $420 million in taxes for this year's budget, to combine with other short-term fixes and spending reductions across agencies. The Democratic governor is seeking even greater tax hikes for next year.
But Republicans, particularly in the House, are reticent about many of the proposals. And the Senate only can consider — or modify — tax measures that win passage from the House, making the action in the lower chamber of great significance to budget-balancing efforts.
The foundation of Edwards' plan is a bill sponsored by Rep. Katrina Jackson, D-Monroe, that would raise Louisiana's 4-cent state sales tax by another penny on every dollar spent. The proposal is seen as critical to the budget-balancing effort because it could kick in quickly and raise money immediately. If it began on April 1 as proposed, the tax hike would raise an estimated $220 million for this year's budget and more than $900 million yearly.
Other measures sought by the governor would increase cigarette and alcohol taxes, charge a sales tax on car rentals, increase taxes on phone service and boost costs on business utilities. New taxes would be charged on online room rentals, like those booked with Airbnb, and tax breaks for companies that pay property taxes on their inventory would be scaled back.
Edwards also is proposing some long-term tax restructuring that could bump up the taxes owed by middle- and upper-income earners and change the way corporate taxes are charged. The administration says those ideas would put Louisiana on a stronger financial footing, allow tax revenue to grow with the economy and end giveaways that have the state paying more in tax breaks to business than it collects from them in taxes.
GOP lawmakers are pushing back against many of the ideas, saying they support efforts to restructure Louisiana's tax system to make it more competitive and to treat people and businesses fairly. But they say state government is bloated and in need of restructuring as well, and they want any tax measures coupled with deeper cuts and reform proposals.
– by AP Reporter Melinda Deslatte
