Budget-Balancing Special Session Ends With Gaps Remaining
BATON ROUGE (AP) — Louisiana lawmakers cobbled together enough money through tax hikes in the closing hours of a special session Wednesday to keep colleges and health services from facing hefty cuts, but only for the remaining three months of this budget year.
The House and Senate failed to broker a tax deal that filled all the gaps in the financial year that begins July 1, with estimates the state could be as much as $800 million short. Those cuts, if not mitigated, likely would fall on higher education and the safety net health care services for the poor.
"We could have done better. It is not a great day for the state of Louisiana," Gov. John Bel Edwards said after the special session shut down.
The Legislature returns for its three-month regular session next week, but taxes can't be considered. The Democratic governor and lawmakers already were talking Wednesday night about the possibility of a second special session in June, to try to raise more revenue to stop cuts on July 1.
Haggling went into the final minutes of the session on the sales tax bills that formed the centerpiece of this year's budget bailout: a 1-cent state sales tax hike and the removal of some tax breaks on the state's existing 4-cent sales tax.
The sales tax bills passed in such a flurry of last-minute votes that the details of the tax changes and even the size of the remaining budget gap for next year were murky.
Bill sponsors raced to beat the session deadline, giving them little time to explain the details before lawmakers were taking votes for final passage. Lobbyists sifted through the final reports in the Capitol halls.
Senate President John Alario, R-Westwego, choked up after the votes were taken, apologizing to senators and to the general public.
"That's not the way to conduct the people's business," Alario said.
Later, he wiped away tears as he talked about the "drastic, drastic cuts" that could be on the horizon. "I just dread what's coming," he said.
Senators were interested in passing further taxes, but they ran into roadblocks with House Republican leaders who balked on many of the ideas.
House Speaker Taylor Barras, R-New Iberia, said he was "a little disappointed that we couldn't have closed the gap further."
"But I respect the body and their individual votes. These are tough financial votes to make for individuals and for businesses," Barras said.
Louisiana started the session facing a shortfall estimated to reach $900 million that had to be closed within three months, and a gap estimated to top $2 billion in the fiscal year that begins July 1, the worst budget woes the state has seen in nearly 30 years.
Edwards and lawmakers agreed to $400 million in patchwork financing and more than $160 million in spending reductions. But they were at odds on taxes to fill the remaining holes, with House Republicans blocking many of Edwards' proposals.
Lawmakers backed a 22-cent per pack cigarette tax hike that begins April 1, a new tax on hotel rooms booked through short-term rental sites like Airbnb and a reinstated car rental tax. Alcohol taxes will rise April 1, boosting the cost of a case of beer by 18 cents. Some business tax breaks will be lessened. And the state will try to collect more sales taxes from online retailers.
The 25-day special session began on Valentine's Day, with dire warnings of college campus shutdowns, shuttered safety net hospitals for the poor and eliminated health programs for the disabled and elderly.
The session was a stark greeting for three dozen freshmen lawmakers who barely learned how to cast votes before being asked to choose between the highly unpopular choices of raising taxes or taking a hatchet to higher education and government services.
In office since January, Edwards said the budget instability he inherited from Republican former Gov. Bobby Jindal was so awful that without higher taxes, the cuts threatened to keep the LSU Tigers from playing football this fall.
Both the House and Senate agreed to raise Louisiana's 4-cent state sales tax by another penny for every dollar spent, for 27 months.
A group of House Republicans — backed by business organizations — had proposed raising it even higher. Democrats objected, saying it would too heavily hit the poor and would let businesses off too easily in sharing the burden of balancing the budget. The larger sales tax hike stalled.
The governor sought changes to the income-tax brackets that could have middle- and upper-income taxpayers paying more. But that hit resistance from Republicans.
– by AP Reporter Melinda Deslatte