Louisiana House GOP Leader Offers Scaled-Back Sales Tax Bill

 

BATON ROUGE, La. (AP) — Louisiana House Republicans resisted Gov. John Bel Edwards' call for $648 million in permanent taxes to balance the budget, opting instead Thursday to advance a short-term sales tax that would raise a little more than half what the Democratic governor wants.

House GOP leader Lance Harris said his proposal offers both spending reductions for Republicans and revenue sought by Democrats to lessen gaps in the budget starting July 1.

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"Our plan doesn't cut as much as we want, and it doesn't raise taxes as much as the governor wants," said Harris, of Alexandria. "This is what compromise looks like. Our plan reduces the size of government while making sure no life-saving services are cut."

The Ways and Means Committee voted 11-6 to send the bill to the full House for debate. It spurned every other tax bill, including the larger sales tax measure sponsored by Democratic Rep. Terry Landry and favored by Edwards.

Harris' bill advanced on the strength of Republican support. But its fate in the full House during the 14-day special session remains unclear.

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Some Republicans who voted to move the proposal out of committee aren't certain to support the tax bill on the House floor. In addition, Democratic support will be needed to reach the two-thirds vote for passage. Nearly all Democrats objected to the bill in committee, saying it raises too little and shouldn't be temporary.

"I'm going to be fighting like hell against it," said Rep. Marcus Hunter, a Monroe Democrat. "It doesn't make sense."

Harris' bill would temporarily renew one-third of a 1 percent sales tax that ends June 30, eliminating some sales tax breaks and continuing to charge some sales taxes on business utilities. The changes would be in place for five years, expiring in 2023.

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The proposal would generate $366 million for next year's budget.

Passage came after a contentious, hourslong hearing — with lawmakers engaged in sometimes testy exchanges about financial figures, the cause of the state's budget problems and the size of the budget gap that needs to be filled.

Harris said his bill would require state government to shrink spending by less than 2 percent to stay in balance next year. But that assumes an across-the-board cut, which is not how the budget is built. Only certain spending areas — particularly higher education and health care — have significant discretionary dollars, making them vulnerable to larger cuts.

Commissioner of Administration Jay Dardenne, Edwards' chief budget adviser, said if no additional money was raised beyond Harris' sales tax bill, damaging cuts would fall on some agencies. But he also suggested lawmakers should vote for the proposal Thursday to continue the tax negotiations.

"While the bill in my view needs to advance, in my view it does not raise the necessary revenue," Dardenne said.

About $1.4 billion in temporary taxes passed by lawmakers to plug budget holes are expiring July 1. With other tax offsets, Louisiana is estimated to get $648 million less in general tax dollars next year.

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House Bills 11 and 27: www.legis.la.gov

– by Melinda Deslatte, AP reporter

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