The fate of legislation that added the renewal of a 4-cent cigarette tax onto a constitutional amendment to dedicate more tobacco settlement dollars to merit-based TOPS scholarships sat in limbo Tuesday because of indecision on how to move forward.
Senate Bill 53 sponsor state Sen. John Alario, R-Westwego, said Tuesday he is still discussing with colleagues whether he wants to concur or reject the House amendments that tacked the cigarette tax renewal onto the bill.
Alario must address the matter before the legislative session ends Thursday.
The constitutional amendment is a Gov. Bobby Jindal-backed plan to permanently set aside more dollars each year for the popular Taylor Opportunity Program for Students.
By using the Jindal-backed SB53 as the vehicle, state Rep. Harold Ritchie, D-Bogalusa, revived his cigarette tax renewal on Monday that Jindal had previously vetoed.
The tax proceeds would be dedicated to health care.
An override of the governor’s veto requires two-thirds legislative majority, but Ritchie’s successful amendment only needed a majority vote.
Tacking the tax onto the TOPS constitutional amendment also makes the tax veto proof because with two-thirds legislative support constitutional amendments go straight to the voters.
The governor has argued that a tax renewal is the same as a tax increase. Although just a renewal of 4 cents, which collects $12 million annually, the proposal has been one of the session’s most controversial because of the governor’s stance.
Jindal reiterated Tuesday he is “disappointed” the cigarette tax was added onto SB53, but that the TOPS constitutional amendment is too important to jeopardize.
“What we have made very clear to them (senators) is we don’t want to do anything that jeopardizes the ability for voters to vote to protect TOPS this fall,” Jindal said.
Alario said the Jindal administration is leaving the matter up to senators and not pressuring them one way or the other, as long as the TOPS plan survives.
If the Senate concurs with the amendments, the constitutional amendment would go before voters on Oct. 22.
If the amendments are rejected, SB53 would move to a legislative conference committee to try to work out differences before session’s ends.
If the legislation goes to conference, Alario said he would oppose any efforts to increase the 4-cent renewal. “I don’t think that’s a possibility,” he said.
Ritchie has argued that his amendment just keeps the cigarette pack sales tax at 36 cents.
As for TOPS, the program currently costs the state $134 million annually. At the state’s public universities, TOPS pays tuition and some fees. Because of anticipated tuition increases this fall, state government would have to pay as much as $150 million or so for TOPS next year.
Jindal’s plan would protect for TOPS $43 million in additional dollars — making a total of $58 million available that could not be spent elsewhere. Currently only $15 million is dedicated to TOPS. The rest of the costs for TOPS come from state general fund dollars.
The state receives about $58 million each year from the Tobacco Settlement — 25 percent goes to the Louisiana Fund for health-care expenses and 75 percent goes to the Millennium Trust Fund, which totals $1.38 billion.
The constitutional amendment would cap the Millennium Trust Fund at $1.38 billion and any funds in excess of that amount will be dedicated toward TOPS.
After the initial $43 million, the plan will increase the dollars by an additional $70 million once the bonds are paid off from 2018 to 2030.
The Millennium Trust Fund currently allocates money to TOPS, the Education Excellence Fund and the Health Excellence Fund, which would further benefit from Ritchie’s amendment.