Thursday, June 20, 2024

House approves phasing out additional revenue boosting sales tax over four years

by BIZ. Staff

By Tryfon Boukouvidis, LSU Manship School News Service    

BATON ROUGE — The Louisiana House on Thursday voted 73-21 to pass a bill that would phase out the extra portion of the state sales tax that the Legislature renewed last year after five months of partisan tensions to address recurring budget crises.

The proposal would reduce the extra 0.45 of a cent of sales tax by one-tenth of a penny every year from 2020 to 2022 and repeal the rest in 2023. 

Last year lawmakers struck a compromise under which the sales tax extension would expire in 2025. This would give lawmakers time to find more permanent solutions to the state’s fiscal shortfalls.

“If you are fine with extracting excessive money out of the taxpayer’s pockets,” said the sponsor of the bill, Rep. Lance Harris, R-Alexandria, “then you don’t have to vote for this bill.”

Under Harris’ proposal, the state is projected to lose $392 million in revenues by 2024. 

The highest ranking Democrat in the House, Rep. Walt Leger of New Orleans, who supports Gov. John Bel Edwards’ position to maintain the sales tax, added an amendment during the debate that would take 0.05 percent of the 0.45 percent sales tax, or $42.5 million a year, to fund early childhood education. 

“This is where we need to be investing and this gives us an opportunity to do it,” Leger said.

The governor, who is up for re-election in the fall, has touted education as one of his priorities this legislative session and on Tuesday announced a plan to fund early childhood education in the state with $18 million. 

Rep. Denise Marcelle, D-Baton Rouge, who criticized Harris’ plan to phase out the extra 0.45 of a cent, asked him during the debate which part of the government he would have defunded last year if the Legislature had not approved the tax measure.

“We may not have needed all that money,” Harris replied. 

Rep. Alan Seabaugh, R-Shreveport, sided with Harris and suggested that the Legislature had made a mistake to extend the sales tax during the 2018 third special session. 

Last year, Seabaugh was one of the most vocal critics of the sales tax extension.

“We raised a tax that we didn’t need to raise and we reached our hand too deep into the hard-working people of Louisiana,” Seabaugh said on Thursday.

The bill now heads to the Senate but odds remain if members of the upper chamber, in which the governor has supporters, will also approve it. 

Meanwhile the Senate Finance Committee on Thursday voted 4-2 to advance a proposal that would legalize the growth of hemp in Louisiana. 

Hemp is the fiber of the cannabis plant and can be used to make rope, fabric, plastics, and fuels. Hemp and marijuana come from the same plant species, but hemp contains nearly no TCH or psychoactive properties. 

The bill by Rep. Clay Schexnayder, R-Gonzalez, will now move to the full Senate. The House already passed the proposed legislation in early May. But the Senate Agricultural Committee added a large number of regulations to the bill, which would impose tight restrictions on the cultivation of hemp by Louisiana farmers. 

The governor has said he would support efforts to regulate the growth of hemp in the state.

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