Governor's Tax Proposals Presented To House Lawmakers

BATON ROUGE (AP) — Gov. John Bel Edwards' revenue secretary has outlined the tax hikes the governor is proposing in a special legislative session to help stabilize Louisiana's finances.

         Kimberly Robinson presented the list Monday to the House Ways and Means Committee, kicking off tax negotiations with lawmakers who have a short time to vet the ideas. The special session can last only 25 days.

         Gov. John Bel Edwards urged lawmakers Sunday to avoid partisan gridlock as they opened a special legislative session aimed at balancing the state's deficit-riddled budget, saying their financial decision-making "will determine the course of Louisiana's future."

         "Don't simply back into your corners and dig in your heels. That is the very best way to ensure dysfunction and failure," the Democratic governor told a joint gathering of the majority Republican House and Senate, as it began the session on Valentine's Day.

         In office since January, Edwards wants to end Louisiana's perpetual budget troubles with a wide array of tax proposals that could have most people and businesses paying more to the state treasury. Republicans, particularly in the House, have shown resistance to tax hikes so far, setting the stage for a possible partisan struggle over the size and shape of government.

         Edwards defended his approach — and criticized his predecessor Republican Bobby Jindal, without naming him, for creating such deep budget problems that they threaten to devastate public health care services and public colleges without new taxes.

         "Blunders of the past have led us to this day of reckoning," said Edwards, a former state lawmaker. "Now is the time to make the more difficult, right decisions instead of the easier wrong ones that appease out-of-state special interests or serve a narrow political agenda."

         The 25-day session must wrap up by March 9.

         The immediate financial problem facing Edwards and lawmakers is a budget gap that ranges from $850 million to $950 million. The $25 billion budget must be rebalanced by June 30, either with additional money or cuts.

         Louisiana's tax collections have been lagging below the forecast used when the budget was crafted. In addition, Jindal and lawmakers didn't fully pay for all the programs they included in the budget and used uncertain revenue sources that haven't panned out.

         Next year's shortfall is even larger, topping $2 billion in the fiscal year that begins July 1, when one-time patchwork dollars used to pay for expenses disappear.

         Edwards hopes to address both problems in the special session.

         To balance this year's budget, Edwards wants to tap into $128 million from Louisiana's "rainy day" fund and to redirect $200 million in Gulf oil spill recovery money earmarked for a lawsuit settlement. He's also recommending $158 million in cuts — and the governor said those cuts should quiet critics who claim he isn't proposing to reduce government spending.

         For the rest of this year's gap and for next year's shortfall, he's largely turned to taxes.

         Republican lawmakers say there's more room to reduce government spending and spend dollars better in agencies, though they've provided few specifics about where they'd cut.

         "We're concerned with looking at cuts and structural changes before we go into looking at tax revenue. I think that we need some assurances that we've done everything we can and we've looked in every crevice to make sure that money is being spent efficiently," said Rep. Lance Harris, R-Alexandria, chairman of the House GOP delegation.

         Without tax hikes, the governor said safety net hospitals and vital health care services for the poor and disabled will shutter, and he said college campuses will begin closing as soon as May 1. He said the TOPS free college tuition program next year "is at risk, and therefore, so is the future for our children."

         "There are some that will tell you that we merely have a spending problem, that simply 'tightening our belts' will eliminate this historic deficit. But let me be clear, we cannot just cut our way out of this crisis," Edwards said. "It simply isn't possible to always do more with less, because if it were, one day, you could do everything for nothing."

         Under the session agenda, lawmakers can raise a wide array of taxes on people and businesses, everything from sales and income tax hikes to boosted taxes on phone service, car rentals, business utilities, room rentals, cigarettes, alcohol, dry cleaning and sports tickets. Certain types of tax breaks also can be reworked or eliminated.

         Senate President John Alario, R-Westwego, said he doesn't agree with Republicans who have said the gaps can be closed solely with budget cuts.

         "If they've got a magical way to do that, I'm all for it. But I just don't see it," Alario said. "I think it's going to take a mix of cuts and some revenue measures."

         – by AP Reporter Melinda Deslatte



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