Just hours after a key legislative victory Thursday, Gov. John Bel Edwards defended legislation to boost the state sales tax by one penny as less regressive than similar taxes in other states.
“There is no other way other than the sales tax,” Edwards said. “It just isn’t possible.”
The governor made his comments to the midwinter conference of the Louisiana Municipal Association, which attracted about 500 officials from around the state.
Edwards spoke shortly after the state House approved the sales tax increase after days of behind-the-scenes talks, including in the hours leading up to the crucial vote.
The tally was 76-27, comfortably over the two-thirds super majority needed — 70 votes.
The measure next faces action in the state Senate which, like the House, is controlled by Republicans.
Edwards, a Democrat, said he was gratified by the vote but cautioned that the issue is far from settled.
All the action is taking place in a special session that has to end March 9.
Boosting the state sales tax is a key part of the governor’s bid to erase a roughly $900 million shortfall by June 30.
“That is the centerpiece,” he said.
The rest of the package includes other tax hikes, spending cuts and the use of one-time dollars.
Edwards said pushing spending cuts and tax increases is hard.
“But I don’t have a choice,” he said. “I have to have a balanced budget.”
Under the bill passed Thursday, the higher rate would take effect on April 30 and raise $200 million in the following two months.
Sales tax hikes often trigger controversy because they are considered highly regressive. That means they have an inordinate impact on low-income earners.
Edwards noted that he backs, and the House approved, a “clean penny,” which means the additional 1 cent would not include exemptions included in the other 4 cents of the state sales tax.
He said the tax is “not as regressive as it could be” but also told the group he exhausted every option before settling on the boost.
Backers also note that, unlike most taxes, raising the sales tax allows the state to generate considerable dollars in a short time.
The state constitution exempts utilities, groceries and prescription drugs from the sales levy.
The bill approved by the House would expire in 18 months, which the governor said earlier was not his preference.
Whether he will try to get that provision removed is unclear.
The governor declined to talk to reporters after his speech.
Follow Will Sentell on Twitter @WillSentell. For more coverage of Louisiana government and politics, follow our Politics blog at http://blogs.theadvocate.com/politicsblog.