BATON ROUGE, La. (AP) — Offering a bit more wiggle room to lawmakers, Gov. John Bel Edwards said Monday he won’t hold firm to the Jan. 19 deadline he set to reach a tax deal with House GOP leaders, if the two sides are making meaningful progress.
At issue are negotiations over closing a $1 billion state budget gap that hits July 1.
In December, the Democratic governor said he needed an “agreement on principle” with House Republican leaders on a tax package by Jan. 19, or he wouldn’t call a February special legislative session to boost tax collections.
But as the deadline nears, Edwards hedged, saying he’d be willing to lengthen talks.
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“If we’re making progress and we’re just not quite there by the 19th, I can extend it,” Edwards told the Press Club of Baton Rouge. “But you can’t extend it indefinitely, for just purely logistical reasons. We have a certain window when the special session would fit” between Mardi Gras and the start of the regular session March 12.
House Speaker Taylor Barras said he’s optimistic the two sides could reach a tax deal for a February session but might need time beyond next week. He said House lawmakers need more details about the governor’s tax proposals. Barras and the governor met Monday to continue talks.
Lawmakers also want more information about how congressional changes made to the federal tax system will impact state government coffers. Louisiana’s tax laws are tied to federal tax laws, and the Edwards administration estimates revenue from state personal income tax collections to rise about $200 million to $250 million annually from the recent changes.
But it’s unclear when the boosted tax collections will arrive, and how much that will chip away at the imminent budget gap.
About $1 billion in temporary sales taxes expire as the new budget year begins. Edwards wants to raise enough taxes to offset the expiring ones, to keep money flowing to government operations. House GOP lawmakers have blocked similar tax ideas proposed last year.
Tax bills can’t be considered in the regular legislative session from March until early June, requiring a special session to pass any tax plans. If that session isn’t held in February, lawmakers could try to craft a budget that strips the entire amount through cuts or let the spending plan linger unfinished until a last-minute June special session.
“We ought to get it done in February. That’s the orderly way to do it. That’s the way that causes the least amount of disruption,” Edwards said.
The governor will offer lawmakers a look at what such budget cuts would look like, when he presents a spending plan Jan. 19. Under state law, he’s required to propose a budget that reflects the dollars available.
Edwards warned the “lion’s share” of cuts will fall on public college programs and health care services, which are the two spending areas with the fewest protections from cuts.
“It will not reflect a budget that I want to see implemented,” the governor said.
Barras said a deal on taxes will need to be coupled with what he described as budget reforms sought by House Republicans. Edwards said he’s willing to consider whatever ideas they offer, but he said he’s already reformed the process by ending the patchwork financing and other “gimmicks” that were previously used to piece together spending plans.
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