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Bill to cut income tax deductions could come back

by Minden Press-Herald

BATON ROUGE — Senate President John Alario said Tuesday he’s trying to revive a proposal to reduce deductions for people who itemize on their state income tax forms, a last-ditch effort to raise additional dollars for next year’s budget in the final days of the special legislative session.

The House rejected the proposal, but Alario said the measure remains the final option to raise additional revenue beyond the $284 million that has won legislative support so far. Without additional money, health, education and other government programs face cuts in the financial year that begins July 1.

“That’s the best chance to raise any significant amount of money, and hopefully that will get us closer to funding TOPS and health care and elementary and secondary education,” said Alario, R-Westwego.

The special session ends Thursday.

The Senate president was hoping to amend the failed House bill sponsored by Rep. Malinda White, D-Bogalusa, into a separate House-passed tax bill by Rep. Jack Montoucet, D-Crowley, that is awaiting debate on the Senate floor.

Gov. John Bel Edwards supports the idea, but it’s unclear if the proposal can win final passage in both the House and Senate. Alario said he’s not even sure if he has enough votes for the proposal in his own chamber.

“If there’s a way to get votes to make that happen, we need to pursue it,” he said.

The measure would raise $88 million to lessen budget cuts next year by ending people’s ability to use state income taxes and sales taxes among their list of itemized deductions. They still could deduct medical expenses, home mortgage interest payments, charitable contributions and other items.

About 23 percent of individual taxpayers would be affected.

The bill fell seven votes short of passage in the House when it was considered Sunday. Most Republicans voted against the measure, including House Speaker Taylor Barras and Alexandria Rep. Lance Harris, chairman of the House GOP delegation.

The state Republican Party was working against Alario’s effort, sending out an email “tax alert” urging people to call their senators in opposition.

“Ask your senator to VOTE NO on any amendment that raises taxes,” the email says.

While haggling continued over taxes, senators were having trouble working out a final version of their plans to spend the $284 million already raised in the session.

The Senate Finance Committee planned a Tuesday meeting to craft its version of the bill to plug the money into next year’s budget. But after delaying the meeting twice, the committee hearing was canceled and rescheduled for Wednesday.

“When you have limited resources and you have to allocate them, it’s always difficult,” said Finance Chairman Eric LaFleur, D-Ville Platte.

He said the House version of the budget bill contained $27 million more than the state has money available, double-counting savings from the state’s Medicaid expansion that had already been used. That means senators have to cut the amount from the bill.

In addition, LaFleur said committee members were concerned about making sure the medical schools received enough money to protect graduate medical education.

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