BATON ROUGE, La. (AP) — With temporary taxes expiring in fewer than five months, lawmakers appeared far from agreement Tuesday about what taxes they might support to close the budget gap created by the expiration.
Dividing lines were evident as the House Ways and Means Committee started sifting through tax bills on the second day of a 17-day special session called by Gov. John Bel Edwards to close the $994 million gap for the financial year starting July 1.
“I am concerned if we can get there with the piecemeal approach that seems to be taking shape here,” said New Orleans Rep. Walt Leger, the top-ranking Democrat in the House.
Some Republicans won’t support taxes at all, and those willing to consider taxes are leaning toward sales taxes, including partial renewal of the temporary 1 percent state sales tax set to expire. One proposal that appears to be gaining traction in the GOP involves renewing one-quarter of the expiring sales tax.
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Democrats are more interested in income tax changes, such as changing the personal income tax brackets to boost taxes paid by middle- and upper-income earners and cutting breaks for taxpayers who itemize deductions on their income tax returns. Those proposals are in line with the recommendations of a Louisiana task force of tax experts and policy analysts.
Among proposals getting the widest combined interest is legislation to permanently eliminate some sales tax breaks. But even in areas of agreement, lawmakers differ about which tax breaks should be removed, particularly how much of the state’s permanent 4 percent sales tax should be charged on business utilities.
Rep. Kenny Havard, a St. Francisville Republican, is proposing one of the most far-reaching bills targeting the elimination of sales tax breaks.
“Sales tax is the fairest tax,” Havard said. “If you start giving exemptions, then it’s not fair anymore.”
His GOP colleagues suggest his bill goes too far in stripping exemptions for businesses.
Leger hit resistance Tuesday as he suggested the income tax changes.
“We are all too reliant on the sales tax as a matter of deriving revenue to pay for the services of government,” he said. “This is a way to try to balance things out.”
Rep. Dodie Horton, a Haughton Republican, said the bill would harm the middle class.
“I can’t support something like this,” she said. “To me, there’s nothing fair about it.”
The Ways and Means Committee is expected to start voting on proposals Wednesday.
Most of the biggest-ticket proposals need a mix of Republicans and Democrats to pass the full Legislature, but the committee is packed with Republicans who will determine which bills get advanced to the full House for debate.
While the tax bills didn’t move, the House Appropriations Committee began advancing spending control proposals pushed by House Republican leaders.
Among the measures advanced without objection was a proposal by House Speaker Taylor Barras to tighten Louisiana’s spending cap, to limit government growth. The New Iberia Republican said the current cap is “not a useful tool” and needs to be reworked.
The Edwards administration expressed concern, saying Barras’ proposal is so restrictive that it could trigger the need for two-thirds votes for even the most minor midyear budget adjustments.
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