Lawmakers have yet to settle on balancing budget

BATON ROUGE — As Louisiana’s special legislative session reached the end of its first week, no consensus emerged for how to rebalance the budget, but Gov. John Bel Edwards said Friday he’s making progress in persuading lawmakers to raise taxes.

The Senate is in a holding pattern, because most budget and tax bills must begin in the House. And the House hasn’t settled on its approach yet.

The House tax and budget committees have held daily hearings to discuss tax ideas and listen to spending cut scenarios, but they have yet to vote on proposals. Lawmakers are negotiating behind the scenes, with Republicans showing resistance to the Democratic governor’s tax suggestions and pushing for deeper cuts.
Edwards told The Associated Press he believes an “overwhelming majority” of lawmakers agree that it will take a mix of cuts and taxes to rebalance Louisiana’s budget and avoid “catastrophic cuts” to state government services and colleges.

“We knew it was going to be a challenge, and quite honestly, the size of this historic budget deficit is catching people by surprise, and it takes awhile — especially for the new legislators — to sort of digest where we are,” the governor said.

RAISING TAXES

Though Edwards said he’s making headway, he acknowledges that doesn’t mean an agreement has been reached on what taxes should be raised — or that tax hike proposals have enough votes for passage yet.

“We’re working hard trying to figure out how we can make them as comfortable as possible to vote for the revenue, and part of that is making sure they understand the implications of not raising enough revenue and where those cuts are going to fall,” he said.

Edwards is seeking cuts, short-term fixes and taxes to close a gap ranging from $850 million to $950 million for the budget year that ends June 30. He’s also asking for tax increases to help address a more than $2 billion shortfall in the fiscal year that starts July 1.

The governor said a 1-cent sales tax increase has to be the “cornerstone” of any budget rebalancing plan because it could raise a substantial amount of money quickly.

“I don’t think there’s a way to avoid cuts that would be catastrophic without” it, he said.

The measure, sponsored by Rep. Katrina Jackson, D-Monroe, would raise the state’s 4-cent sales tax by another penny on every dollar spent. The new tax wouldn’t have many of the exemptions allowed for certain types of purchases from the other four pennies of the tax.

The sales tax hike would kick in April 1, raising an estimated $220 million before June 30 and $910 million annually. Edwards said he wants the tax increase to be a “bridge” until other long-term changes he’s proposing to Louisiana’s tax structure can take hold.

MAKING CUTS

Some Republicans, particularly in the House, say they want to slash more government spending before considering any tax hikes. Some say they won’t support any tax increases.

“My constituents cannot afford to pay higher taxes right now. We need more cuts,” said Rep. Blake Miguez, R-Erath.

Edwards and lawmakers have made $60 million in reductions so far to rebalance the budget, and the governor is proposing $100 million more. He said he’s not heard any detailed suggestions for deeper reductions that won’t force shutdowns of safety net hospitals, health care services for the disabled and college campuses.
Rep. Patricia Smith, D-Baton Rouge, said she will “vote on every tax that comes before me and more if I can find them” to stop such closures.

TIME CRUNCH

The special session must end by March 9.

Edwards hopes the full House will vote on tax and budget cut plans by Tuesday or Wednesday, to give the Senate enough time to sift through the proposals. The governor said he believes a deal will be struck that won’t devastate services.

“I remain optimistic that the consequences are so bad that we’re not going to fail,” he said.