Wednesday, July 17, 2024

LA Legislative Black Caucus indicate budget compromise seems more possible

by BIZ. Staff
By Drew White and Paul Braun, LSU Manship School News Service

LAFAYETTE — Some members of the Louisiana Legislative Black Caucus stated their willingness to accept a half-cent increase in the state sales tax proposed Tuesday by Gov. John Bel Edwards, increasing the chance for a compromise with Republicans in a second special session.

Caucus members also said in interviews that they supported other revenue-raising measures that Edwards unveiled Tuesday as the Legislature began a second special session to try to resolve a projected $648 million shortfall in the state budget.

Caucus members were opposed earlier this year to retaining any part of the extra penny of sales tax that expires this summer, and their demands to restructure state income tax brackets or eliminate some itemized deductions for wealthier state residents helped lead to the collapse of the first special session in March.

The 24 members of the Black Caucus in the House are a pivotal voting bloc because House Republicans are deeply divided, with 27 of the 61 of them refusing to vote for any kind of tax in the first special session.

Revenue-raising measures must originate in the House and require a two-thirds vote, so Republicans who are willing to consider such measures must make a deal with Black Caucus members to pass the bills.

One concern shared by caucus members and other Democrats is that an increased sales tax disproportionately affects lower-income Louisianans, taking a bigger portion out of their paychecks. Extending a half-cent of the sales tax could raise $400 million in revenue to help replace the taxes that are expiring.

“I believe that if we are going to vote for a sales tax, we need to have certain provisions in place to protect these very fragile people,” Rep. Ted James, D-Baton Rouge said to the town hall crowd.

James said in an interview that caucus members might propose an increase in the earned income tax credit, which could help offset $10 million or more of the extra sales tax burden on poorer residents.

Gov. Edwards has called for “cleaning” the four cents that would remain of the current five-cent sales tax– a simplified term for eliminating most of the 180 sales tax exemptions that cut down on state revenues.

Some of the exemptions reduce the sales tax paid by businesses. Edwards–in a nod to low income voters–has proposed retaining sales tax exemptions for groceries, pharmaceuticals and utilities.

“Business and industry have to come to the table; they don’t want to hear it, but it’s true,” Rep. Barbara Carpenter, D-Baton Rouge and a member of the caucus, said.

Rep. Katrina Jackson, D-New Orleans, stated that 46 percent of state sales taxes are paid by corporations and businesses, while 54 percent are paid by individuals.

She said she would be willing to support a half-cent sales tax increase and wants limits on the business exemptions to be renewed.

“The governor’s plan – I’m behind,” Jackson said. “Not because he’s a Democrat, but because it makes common sense.”

The first special session also was derailed because Republican legislators added amendments to the revenue bills to tighten eligibility for Medicaid recipients and encourage them to work.

Rep. Jack McFarland, R-Jonesboro, said last week that Republicans were unlikely to attach similar Medicaid provisions this session, which were deemed by Black Caucus members to be “a poison pill” to keep them from supporting compromise tax measures.

Caucus members said their constituents would be among the hardest hit if state spending on health services and education is slashed. But some also said they could not agree to an increase in the sales tax in the first special session if wealthier taxpayers were not going to bear more of the tax burden as well.

Members of the caucus were joined by Edwards in discussing the state’s budget shortfall and social issues at a town hall meeting in Lafayette hours before the official start to the second special session.

“Were I a Republican governor asking this legislature to do exactly what I’m asking them to do, they would salute and say, ‘Thank god we finally have somebody who is responsible about managing the state of Louisiana,’” Edwards said at the town hall.

Edwards struck a more diplomatic tone Tuesday afternoon when he presented his budget proposal to legislators and members of the public at the University of Louisiana- Lafayette.

“My hope is that we can shake the divisive partisanship that’s begun to take root, put aside our differences, and put in place the solutions the people of Louisiana deserve,” Edwards said.

Black Caucus Chairman Rep. Randall Gaines, D-LaPlace, said the caucus has not taken an official position on the specific instruments for raising revenue and that they would tailor their platform to Edwards’ proposals.

Rep. Terry Landry, D-New Iberia, said he was comfortable with making a permanent, half-penny increase in sales tax, but wanted to see that measure balanced with another more progressive tax.

“You can tell there are people who are suffering, people who are in need,” Landry said. “And we can debate how we will get there all day long, but that debate needs to be sincere and it needs to be where everyone has to take a little cut or tighten their belt up.”

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