Budget-Balancing Special Session Reaching Its End Today
BATON ROUGE (AP) — College students and parents of children with developmental disabilities were waiting into the final hours of Louisiana's special legislative session to learn if Gov. John Bel Edwards and lawmakers would broker a tax deal to stave off hefty cuts to their programs and services.
The Democratic governor and leaders of the majority Republican Legislature negotiated behind closed doors on a possible budget and tax agreement that, if reached, would require a flurry of votes before the special session ends Wednesday at 6 p.m.
Louisiana faced a shortfall estimated to reach $900 million that must 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 appear to have agreed to $400 million in patchwork financing and more than $160 million in spending reductions. But they have not agreed on enough taxes to fill the remaining holes.
Lawmakers said they were optimistic a deal could be struck that would stop the threat of damaging cuts to public colleges and health care services.
"We don't have a choice," said House Appropriations Chairman Cameron Henry, R-Metairie. "Yes, I'm confident it'll come together."
Already passed are 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. Some business tax breaks will be lessened. And the state will try to collect more sales taxes from online retailers.
Expected to reach final passage are an alcohol tax hike that would raise the cost of a case of beer by 18 cents and a sales tax hike on consumers and businesses.
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.
But House Republicans have bottled up many of the governor's proposals.
Disagreements over how to generate the remaining dollars to fill budget gaps hinge on two tax types: the state sales tax and the individual income tax.
Both the House and Senate have agreed to raise Louisiana's 4-cent state sales tax by another penny for every dollar spent. But a group of House Republicans — backed by business organizations — for days has been floating the idea of raising it even higher.
Democrats object to anything higher than the 1-cent tax hike, saying it would too heavily hit the poor and would let businesses off too easily in sharing the burden of balancing the budget.
Rep. Gene Reynolds, chairman of the House Democratic Caucus, said any sales tax above the 1-cent increase "we're totally against." And he said some rank-and-file Republican lawmakers also object to the idea.
"There's no way they can get the votes for that to pass," said Reynolds, D-Minden.
Henry said the governor was pushing changes to the income-tax brackets that could have middle- and upper-income taxpayers paying more and an increased tax credit for the working poor.
"Some members are more comfortable raising the sales tax rate for a short period of time instead of altering income tax forever," Henry said.
Also under consideration was a proposal to reduce sales tax breaks that businesses get for their utility costs and their equipment purchases.
– by AP Reporter Melinda Deslatt