BOSSIER CITY — State Sen. Ryan Gatti, R-Bossier City, said the upcoming Legislative session will be a “bloodbath.”
During a town hall meeting held for local officials at his law offices in Bossier City Thursday, Gatti gave attendees an honest idea of how the upcoming legislative session will unfold.
He said the main battle among legislators will involve where and what to cut in the state budget, particularly when it comes to billions of dollars in business exemptions and industrial tax credits and the inventory tax.
“The latest I heard was that we were looking at a 10-year phase out of the inventory tax and then taking away exemptions,” Gatti said.
“Where do we cut in the state budget that has been cut for nine years? The inventory tax is a program that has grown from $30 million to $400 million,” he added.
The inventory tax works by taxing businesses’ inventory stored in Louisiana, the business then pays that money to local governments, and the state reimburses the business. By removing this, it leaves a hole in funding for many local towns and parishes.
“We have to get rid of it. But we need something to backfill the local governments,” said Gatti.
“You can’t gut local government’s budgets. They can’t go to the people (to make up the lost money). You can’t always put it on the back of the middle class in rural communities.”
Minden Mayor Tommy Davis expressed his concern to Gatti.
“Our inventory tax is not that large, but you keep whittling us down on things over time,” Davis said. “Losing the inventory tax is not going to kill us, but if you take that away there’s nothing to replace it.”
That’s where examining the $5 billion worth of business exemptions comes into play.
Gatti described the program as “TOPS on steroids.” He said he is in favor of a 10-year phase out that would couple with the phase out of the inventory tax.
“It’s unsustainable…You can’t have so many exemptions that the state writes you a check at the end of each year. We’ll give you the credits, you just can’t get a refund. That would’ve funded a lot of the problems we’re facing,” Gatti said.
Other issues the legislature will consider are a gas tax that would go towards repairing the billions of dollars worth of necessary repairs to bridges and roads.
“Some people say it’s five cents all the way up to 27 cents. I’ve had people tell me, ‘If you charge me another 15 cents and promise me good roads, I’ll support it.’ And I’ve had people say,
‘If it’s one penny more, I’m pulling out of the state.’”
He said Gov. John Bel Edwards will call the legislature into a special session next month to solve
an expected $300M to $485M shortfall for next year’s budget. He assured the attendees it was not to raise taxes, but instead to “broaden cuts.”
“We have to broaden the base and lower the rate,” he explained. “This special session is not to raise taxes, it’s to take the time to figure out where we want to cut.“
Minden business owner John Madden asked Gatti about a processing tax on oil and gas as a way to raise revenue. Gatti answered that it would never pass.
“That is the biggest lobbying group in America,” Gatti answered. “I’m in favor of it, but it will never pass.”
He also took the opportunity to address the burn chamber at Camp Minden, explaining he took depositions from Explo officials following the explosion in 2015 and proposed a bill during the last legislative session that would have prohibited open burn in all of Louisiana.
Gatti said the open burn issue will be a hotly debated topic for years to come. However, he admitted that the clean burn chamber currently in place is “a lot better situation than we were faced with three years ago.”
“I was the most skeptical. I told (ESI) they have to prove to the communities in Doyline and Haughton that you’re going to do what you say you’re going to do. To this day, I haven’t met anyone who said ESI hasn’t done the job they promised.”