LA House Considering Compromise Proposal On Income Tax Bill
BATON ROUGE (AP) — House lawmakers were negotiating behind the scenes ahead of a Wednesday vote on a bill to raise more than $100 million in taxes for next year's state operating budget.
The bill, sought by Gov. John Bel Edwards to help lessen budget cuts, would decrease a tax break for those who itemize deductions on their income tax returns, largely upper-income earners.
The proposal stalled in the Ways and Means Committee by a one-vote margin. But a similar version sponsored by Rep. Malinda White, D-Bogalusa, is up again Wednesday for a committee vote, with lawmakers trying to strike a deal that could win House support.
WORKING ON A COMPROMISE
The compromise would involve making the bill temporary and including a mechanism to shrink the money raised if tax hikes passed earlier this year bring in more dollars than expected.
Ways and Means Committee Chairman Neil Abramson, D-New Orleans, who cast the deciding vote to stall the prior bill, described the compromise proposal as "a last-resort, short-term loan as a safety net if we absolutely need it."
"If we end up raising more than the current forecast (shows from other tax increases), then this will never go into effect," Abramson said of the proposal.
If the tax break is reduced, the effect would be temporary, proposed to expire in 2018, Abramson said.
BALANCING THE BUDGET
The Democratic governor wanted the cut to the itemized deductions as part of a package of tax bills aimed at raising $600 million for the financial year that begins July 1. He says that's the amount needed to adequately fund the TOPS college tuition program, the safety-net hospitals for the poor, college campuses, K-12 education and other services.
Republicans in the House have agreed to about $220 million in revenue-raising bills so far, bottling up many other tax proposals. Senate President John Alario, R-Westwego, said he doesn't expect lawmakers to reach the figure sought by the governor.
"If we got to $450 million, I would be awfully happy with that," Alario said Tuesday.
But he acknowledged even that was a "difficult target to reach."
Business groups oppose several of the governor's bills. The state Republican Party is urging members not to support taxes. And many GOP lawmakers, particularly in the House, say they won't agree to any more taxes after the Legislature raised $1.2 billion in taxes for next year's budget earlier this year.
Efforts to trim the itemized deduction tax break appear to be the only remaining tax hike that could gain traction in the House.
SALES TAX CLEANUP BILL
With the House scheduling committee debate on White's bill, the Senate moved ahead Tuesday with efforts to clean up sales tax unintentionally charged on items like high school football game tickets, donations to food banks and school lunches.
Sales tax increases passed in the final moments of the tax special session earlier this year swept in items that weren't meant to be taxed. Senators had suggested they would stall the cleanup legislation until lawmakers in the House agreed to more taxes for next year's budget than they've supported so far.
"There has been movement," said Senate Revenue and Fiscal Affairs Committee Chairman J.P. Morrell, D-New Orleans, before the committee advanced a sales tax cleanup bill to the full Senate for consideration.
SHORT CLOCK ON SESSION
To make everything work, lawmakers don't just have to pass the tax bills. Lawmakers would have to piece together a budget directing how to spend it. Alario said he's concerned because such a budget bill hasn't even been filed in the House, where it must start.
Time is running short to get deals struck and the money in place. The 18-day special session must end by June 23.
– by AP Reporter Melinda Deslatte