Louisiana House reaches sales tax renewal deal

Local News
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The Louisiana House smashed through its gridlock Friday, bridging disagreements about fractions of a penny and backing a sales tax proposal that could keep colleges and state services from seeing steep budget cuts in July.

With a 74-24 vote , lawmakers sent the Senate a bill that would renew 0.45 percent of a 1 percent sales tax that expires July 1. The measure scraped through the House with just four more than the 70 votes it needed to pass. Cheers erupted in the chamber. One lawmaker shouted, “Thank God!”

The legislation, sponsored by Baton Rouge Republican Rep. Paula Davis, would keep the state sales tax rate at 4.45 for seven years. A mix of Republicans and Democrats supported the measure, hoping that could be a compromise that wins Senate passage before the special session must end Wednesday.

The deal aimed to bridge disagreements between Gov. John Bel Edwards’s push for a 0.5 percent rate and House GOP leaders’ push for a 0.4 percent rate and stop Louisiana’s third special session this year from crashing and burning without an agreement, like the prior two.

The proposal would raise $463 million — $43 million less than needed to fully finance the upcoming budget. Senators previously supported the 0.5 percent rate, but House lawmakers seemed optimistic the Senate would take the deal offered, rather than risk a last-minute session meltdown.

After passing the tax, lawmakers then backed a budget plan to spend the dollars.

Without additional dollars from this session, steep budget cuts will hit college campuses, the TOPS tuition program, public safety services, district attorneys, sheriffs, state parks, state-run public schools and education programs in July. Louisiana’s social services agency says the food stamp program will be eliminated.

This special session centers on whether part of a 1 percent sales tax should be continued next month, when the state’s sales tax rate is scheduled to drop from 5 percent to 4 percent. Renewal takes a two-thirds vote, requiring support from both Republicans and Democrats.

Edwards, House Democrats and moderate House Republicans wanted to renew half the sales tax, a proposal previously backed by the Senate but defeated in the House on Thursday. House Republican leaders were backing a 0.4 percent renewal rate.

Financially, the difference is 10 cents in sales tax charged for every $100 purchase — and $86 million for next year’s budget. Philosophically, the difference might be greater.

House GOP leaders say they’re trying to contain government growth. The said they’ve compromised by moving from the no-tax stance of many members to first offering a 0.33 percent renewal rate in the last special session and a 0.4 percent renewal rate this time. They said Edwards and Democrats haven’t budged.

The Democratic governor and supporters of the half-percent renewal rate said people still will pay fewer taxes than they do now. Democrats said they’ve already compromised by agreeing to sales taxes favored by Republicans, rather than income taxes.

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