Wednesday, February 21, 2024

Advance of revenue bills sets up dramatic vote Thursday

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

BATON ROUGE — House panels on Wednesday advanced three revenue-raising bills that would reduce the state’s $648 million budget shortfall by varying amounts and passed a supplemental spending bill aimed at reducing cuts to TOPS scholarships.

None of the revenue bills, which were approved by the House Ways and Means Committee, would provide as much revenue as Gov. John Bel Edwards has sought to avoid cuts in state services.

The three bills proposed extending different sales tax rates, ranging from one-third to one-half of an expiring penny. The committee’s action set up a potentially dramatic set of votes on the House floor Thursday as the Legislature tries for a third time this year to resolve the state’s budget woes before the fiscal year ends June 30.

Meanwhile, the House Appropriations Committee passed a supplemental budget bill that could fund TOPS at 90 percent to 97 percent of current levels depending on how much additional revenue was raised.

The bill also would prioritize funding for higher education and district attorneys, preserve the state’s food stamps program and reduce cuts to local sheriffs housing state prisoners, though possibly not by enough to win their support.

Edwards wants the Legislature to renew a half-cent of the sales tax penny that is scheduled to expire on July 1 and reduce sales tax exemptions for individuals and businesses.

The vote on the supplemental spending bill came after several dozen Louisiana college students packed the Appropriations hearing wearing t-shirts with the names of colleges outside the state, underscoring that they might have to look elsewhere if TOPS funding is cut.

The Ways and Means Committee rejected two bills Wednesday that proposed a 4.5 percent sales tax, the rate preferred by Edwards and most Democrats.

In a surprising 9-7 vote, the committee advanced an unconventional bill that would renew a half-cent of sales tax for three years followed by reductions to four-tenths of a cent and one-third of a cent for two years each.

“I’m shocked,” chimed bill sponsor Rep. Stuart Bishop, R-Lafayette, after the vote.

While Bishop’s bill would initially raise sales tax to the rate requested by Edwards, the item offers fewer reductions in sales tax exemptions than other proposals. Estimated to generate $453 million in revenue, it would fall short of raising the $506 million needed to fully fund the budget passed last session and signed by Edwards.

Rep. Randal Gaines, D-LaPlace and chairman of the Legislative Black Caucus, said the caucus would push Thursday to amend Bishop’s bill to mirror what Edwards wants by eliminating the staggered reduction of the sales tax rate and reducing sales tax exemptions.

Gaines said there was no reason for Bishop’s bill to “set an arbitrary deadline to reduce sales taxes” without concrete evidence that the reduction would be offset by economic growth.

The committee also approved a bill sponsored by Rep. Paula Davis, R-Baton Rouge, and represents the main compromise being offered by House Republican leaders. It proposes a four-tenths renewal of the expiring sales tax and would bring in roughly $424 million in revenue.

“Some of my Republican colleagues aren’t happy with it, some Democrats aren’t happy with it, so maybe it’s the right bill,” Davis said.

Asked whether she would stall the bill if it passed the House and returned from the Senate with a higher sales tax rate, she said that “my belief is that 0.4 is the right number and a good compromise, but I will respect the will of the body.”

The committee’s chairman, Rep. Neil Abramson, D-New Orleans, filed a bill Monday without a specified sales tax rate.

It was amended Wednesday to renew one-third of the expiring penny of sales tax. That was the rate that was proposed by Republican House leaders last session and was voted down 66-38 moments before the session ended.

“I wouldn’t say my bill is a final product,” Abramson said about his quick acceptance of the amendment. “The way my bill left the committee is not necessarily how I want it to look at the end of the day.”

Abramson’s was the only bill sponsored by a Democrat to make it out of committee, though he usually votes with the Republicans.

The two bills with Edwards’ proposals were shelved by their authors.

Rep. Terry Landry, D-New Iberia and the sponsor of one of those bills, questioned the House Republican Delegation’s push to decrease the size of government. Landry said state employees are “leaving every day” for the relative stability of private sector jobs.

“All those individuals we rely on every single day to make our state safe, to educate our children, to improve our infrastructure, and we’re arguing about a half a penny,” Landry said. “Because most people cast it to the side. Most people don’t stoop to pick it up.”

The committee also struck down a bill presented by Rep. Jay Morris, R-Monroe, that would have scaled back sales tax breaks to businesses and re-dedicated the money to TOPS and other programs.

The committee action came on the third day of the 10-day special session that serves as a final opportunity for legislators to compromise and address the looming fiscal cliff before the fiscal year ends June 30.

Administration officials had testified before the Appropriations Committee vote Wednesday that the Department of Children and Family Services could fund the food stamps program for only about six months if the budget passed earlier this month is not supplemented.

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