BATON ROUGE, La. — The Louisiana House has taken up its first significant proposal to fill a large, looming state budget hole. And lawmakers in the chamber resoundingly rejected it.
Tuesday’s vote raises questions about whether the majority-Republican chamber will take any actions this session to make a dent in the more than $1 billion budget gap that hits in mid-2018, when temporary sales taxes passed by lawmakers expire.
Only 22 lawmakers voted for Rep. Jay Morris’ bill to scrap millions in sales tax breaks. Seventy-nine opposed it.
The sales tax breaks targeted by Morris’ proposal already have been temporarily suspended to help balance the state’s budget this year and next year. Morris, a Monroe Republican, was proposing to remove those tax breaks permanently to raise $173 million a year, starting on July 1, 2018.
He noted the state currently hasn’t been giving the tax breaks in his legislation.
“All it does is keep our revenue the same. It’s not an increase. It simply keeps us where we are, status quo,” he said.
But lawmakers chipped away at some of the impact of the bill, carving out favored tax breaks for businesses, even before they jettisoned the entire piece of legislation. Rep. Julie Stokes, a Kenner Republican, then described it as bad tax policy, with different tax breaks applying to different parts of the state sales tax.
As he realized lawmakers would spurn his bill, Morris chastised them for ignoring the future financial gap. He said lawmakers need to raise at least $700 million to $800 million “to keep us from having some cuts that are devastating” in the 2018-19 budget year.
“Acknowledge the problem is real and face the reality,” Morris told lawmakers.
This is the last regular legislative session in which lawmakers can raise taxes. If they don’t address the gap before the June 8 adjournment, they’d have to return in a special session before the mid-2018 tax expiration to stop deep budget cuts.
The House could reconsider Morris’ bill, which did win support from Republican House Speaker Taylor Barras; Rep. Lance Harris, the chairman of the House GOP delegation; and Rep. Neil Abramson, the Democratic chairman of the House tax committee.
But many rank-and-file House Republicans have shown resistance to anything considered a tax hike — and the bill needs a two-thirds vote in the majority-GOP chamber.
Democrats voted as a near-block against Morris’ proposal. But Rep. Walt Leger, the top-ranking House Democrat, said they’ll be supporting a similar bill to sweep away some sales tax breaks that is sponsored by Rep. Ted James, a Baton Rouge Democrat.
“We intend to vote for that bill,” Leger said.
He said Democrats asked Morris to bring up his bill on Wednesday, the same day that James’ bill is scheduled. Leger said Morris refused, so Democrats pulled their support.
A second, smaller bill to repeal a tax break for homeowners and renters who are charged an assessment on property insurance to cover debts of the state-run Louisiana Citizens Property Insurance Corp. also failed to win House support Tuesday. It would have raised $9 million toward filling the mid-2018 gap.
House Bills 609 and 637: www.legis.la.gov