Senate Begins To Chart Its Path On Tax Changes And Budget

BATON ROUGE (AP) — Louisiana's senators have started piecing together their proposal to balance next year's budget without forcing deep cuts to public colleges and health services, building off a package of House tax bills.

         The Senate Finance Committee late Tuesday tweaked and then, without objection, passed eight House-approved tax bills aimed at raising revenue for next year's $24 billion budget.

         As passed by the House, the bills would generate $615 million for the fiscal year that begins July 1, nearly all of it used to stop cuts to higher education campuses.

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         Committee Chairman Jack Donahue said senators were trying to drum up $250 million more to keep health care services and the LSU medical schools from steep reductions. Senators got at least $100 million more by bumping up a cigarette tax proposal.

         Two other tax bills were scheduled for Wednesday hearings in the Senate committee.

         As the measures approved Tuesday head to the full Senate for consideration, the proposals would scale back state subsidies for businesses and raise the state cigarette tax by 64 cents a pack. Most state tax credits would take a 28 percent across-the-board cut.

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         "I've made some really hard votes here on this committee tonight," said Sen. Ronnie Johns, R-Lake Charles.

         Business groups opposed many of the measures as hefty tax hikes, saying they could jeopardize deals in the works and threaten the financial health of existing companies.

         "You're decreasing our ability to attract jobs and new investment," Rhonda Reap-Curiel, legislative chair of the Louisiana Industrial Development Executives Association, said of one measure.

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         Representatives of companies and business lobbying groups objected to bill after bill, though they acknowledged they were unlikely to stall the proposals as lawmakers struggle to balance the budget.

         As she objected to one proposal, Reap-Curiel said: "I'm sure I'm wasting my breath."

         "There's been a lot of breath wasted here tonight. Go on," replied Donahue, R-Mandeville.

         Among the largest adjustments made by the Finance Committee was a rewrite of the cigarette tax bill. The House agreed to a 32-cent a pack tax increase. Senators doubled that increase and added in new tax hikes on cigars, smokeless tobacco and electronic cigarettes.

         As rewritten, the cigarette tax bill would raise $170 million a year, $102 million more than the House version. Louisiana would charge a $1 tax per pack of cigarettes, up from 36 cents.

         Other bills advanced by the Senate committee include the temporary suspension of a 1-cent sales tax exemption on business utilities and limits on the tax credit Louisiana residents can take for income taxes paid to another state.

         House-approved proposals to scale back the state's solar tax credit and to enact a $200 million cap on the film tax credits Louisiana certifies each year were scheduled for a Wednesday hearing.

         Several measures don't meet Gov. Bobby Jindal's parameters of what tax changes he's willing to consider. The Republican governor, who is building a likely presidential campaign, won't agree to anything considered a net tax increase by national anti-tax activist Grover Norquist. Lawmakers are looking for loopholes to avoid a veto of the financing plans.

         – by AP Reporter Melinda Deslatte

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