Louisiana lawmakers open new session with old financial woes
By MELINDA DESLATTE
Louisiana’s finances again will be front and center as lawmakers return to Baton Rouge on Monday for a two-month regular legislative session, with the main debate remaining how to stabilize the state budget after nearly a decade of persistent shortfalls.
Gov. John Bel Edwards, a Democrat, is pushing a rewrite of tax laws aimed at raising new dollars for the state treasury and offsetting the loss of $1.3 billion in temporary taxes that expire in mid-2018.
House Republican leaders are resistant to tax hikes and instead are looking for ways to shrink government spending, in a continuing philosophical dispute with the governor over the best approach to balancing the state operating budget.
Here are five things to know about the regular session:
The 60-day session opens at noon, with Edwards outlining his goals to a joint gathering of the House and Senate an hour later.
The session is shorter than the ones in even-numbered years and is primarily designed to deal with budget and tax matters. Lawmakers are limited to introducing no more than five nonfinancial bills that carry statewide impact, and those proposals had to be prefiled ahead of time.
Lawmakers must wrap up work by 6 p.m. on June 8. The new budget year begins July 1.
Edwards proposed a $29 billion operating budget for next year that is more than $400 million short of what the administration thinks is needed to pay for all of its spending priorities.
The governor wants more dollars steered to K-12 spending increases, full financing for the TOPS college tuition program, roadwork and new employees at the state’s child welfare agency. He wants to give state workers a pay raise and open a new juvenile detention center in Bunkie.
The budget proposal currently would have TOPS pay for about 70 percent of students’ tuition, leave the transportation department short of the money it needs to draw down available federal dollars for roadwork and would cut rural hospitals and safety net hospitals.
THE GOVERNOR’S PLAN
Edwards is pushing tax changes he says would lower the tax bills of 90 percent of personal income taxpayers by shifting more tax burden to business.
To help replace $1.3 billion in temporary, mainly sales taxes set to expire in mid-2018 while also raising more money, Edwards wants to levy a new tax on gross receipts. It’s estimated to raise up to $900 million annually from businesses.
The 0.35 percent tax on sales would be charged on businesses with more than $1.5 million in gross receipts annually, which the Edwards administration estimates is 6 percent of Louisiana’s companies. Other businesses would be assessed a flat tax from $250 to $750.
The governor wants to let a temporary 1 percent increase in Louisiana’s sales tax to expire in exchange for expanding what’s subject to sales tax. Items that could be newly taxed include cable television, Netflix and other digital streaming services, landscaping and telephone services.
Edwards also supports an increase in the state gas tax to pay for road and bridge work.
Business groups and many GOP lawmakers say the gross receipts tax, which Edwards calls a Commercial Activity Tax, would harm companies working on tight margins by not accounting for profit or expenses. They worry it could discourage economic growth in a state with one of the nation’s highest unemployment rates.
The tax wasn’t among the recommendations of a legislatively created task force charged with finding ways to create a stable and fair tax structure for the state.
Many Republican lawmakers, particularly in the House, are resistant to the idea of changing Louisiana’s tax structure if the aim is to bring in more dollars for government.
NOT JUST TAXES
Beyond finances, lawmakers will consider whether to rewrite Louisiana’s criminal sentencing laws to shrink the state’s prison population, whether to toughen training standards for police officers and whether to eliminate Louisiana’s use of the death penalty.
Debates are planned on proposals to raise the state minimum wage, enact equal pay legislation and fight local community efforts to remove Confederate monuments.