Wednesday, February 28, 2024

Another day, another standstill in the Louisiana Legislature

by BIZ. Staff
By Tryfon Boukouvidis and Drew White, LSU Manship School News Service

BATON ROUGE – Another day, another standstill in the Louisiana Legislature as a potential compromise on tax issues between Democrats and Republicans dissolved in the House Ways and Means Committee Wednesday morning, leading to the deferral of more than half of the proposed bills.

A solution to the state’s fiscal crisis seemed more possible early in the day than in the four previous special sessions over the last two years when members of the Legislative Black Caucus and Republican leaders talked about a possible deal.

But hurdles quickly materialized, and hopes for a quick compromise fell apart.

The Black Caucus has been opposed to extending any portion of a penny increase in the sales tax that will expire this summer because sales taxes hit poor people disproportionately.

But caucus members seemed willing early Wednesday to accept the extension of a quarter-of-a-penny sales tax if Republicans on the committee would agree to cut a state tax deduction in half for residents who itemize deductions on their federal returns.

State officials said reducing the deduction, which is mainly taken by 25 percent of state taxpayers well-off enough to have expensive mortgage and property taxes, could raise $100 million in state revenue.

The temporary one-cent increase in the sales tax, which was imposed in 2016, expires this summer, leaving the state facing a nearly $1 billion fiscal cliff.

Louisiana now allows taxpayers to fully deduct the difference between the standard federal deduction and the federal itemized deductions from their state returns.

The debate heated up at the committee hearing when Rep. Stephen Dwight, R-Lake Charles, introduced an amendment that would have reduced a proposal for extending a half of a penny of the sales tax, which some Republicans favored, to a quarter of a penny.

Retaining one quarter of a cent of the tax would increase state revenue by $220 million starting on July 1.

Rep. Ted James, D-Baton Rouge and a member of the Black Caucus, complained about some of the Republican tactics in packaging some of the bills, saying, “I didn’t come here for this. If we don’t do things correct and in order, let’s go home,” he added.

Dwight responded that without his bill, “the session is over.”

“I hate to be in this position, but this will not be a successful special session without this bill,” he added. “I want this bill to go forward to the floor.”

Rep. Barry Ivey, R-Baton Rouge, also expressed frustration, saying Dwight’s proposal “makes the taxpayer wonder what we did the last two years.” He said he thinks “people deserve much better.”

Referring to the Black Caucus members, Dwight commented after the hearing that “it’s difficult, because I need the caucus members to get [the bill] out of committee. Without them I can’t get it out.”

Before the meeting turned contentious, Rep. Patricia Smith, D-Baton Rouge, succeeded in moving three other tax bills forward.

Members approved an amended version of a Smith bill to reduce the three sales tax holidays to one comprehensive three-day tax holiday with a vote of 13 yeas, three nays. A sales tax holiday is an annual weekend event in which the state allows certain items to be purchased sales-tax-free.

Smith’s other bills would raise over $1 million in tax revenue on residents’ telecommunication services and purchases to fund the Louisiana Commission for the Deaf, a program that helps people who are deaf or blind.

The extra taxes would finance interpreter recruitment and training to provide access to government affairs for the disabled.

One of Smith’s bills would institute a tax increase from 4.5 to 5 cents per month on residential and business telephone lines, while the other would place a surcharge on prepaid mobile devices or mobile device cards.

Matt Houston and Katie Gagliano contributed to this story. 

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