Republican state lawmakers report that calls and emails to their district offices are running against new taxes sought by Gov. John Bel Edwards to solve the state’s budget crisis.
The state Republican Party is hammering the governor, a Democrat.
Meanwhile, business groups are telling Republicans not to touch their tax breaks.
Republicans in the Louisiana House on Thursday will provide the first measure of their willingness to vote for the tax increases, nearly midway through the 25-day special session. To do so, they will have to vote contrary to the wishes of vocal constituents, their party and their business allies.
In all, the House will vote on up to 33 tax measures, but the key one will be Edwards’ proposal to raise the sales tax by a penny, House Bill 62 by state Rep. Katrina Jackson, D-Monroe.
Without the money the additional penny would produce by June 30 when the current fiscal year ends, no one has been able to explain how the Legislature would avoid devastating cuts to the state’s colleges and universities, the disabled who depend on state health care, the prison system and myriad of other programs, including those aimed at restoring Louisiana’s eroding coast.
No one seems sure how the sales tax vote will go. Bills that would suspend tax credits or exemptions need 53 votes, while measures that would repeal tax credits or would raise taxes need 70 votes in the 105-member chamber.
“It’s a toss-up,” House Speaker Taylor Barras, R-New Iberia, said in an interview. “It’s a hard one to read.”
State Rep. Lance Harris, the Republican caucus leader, and state Rep. Gene Reynolds, his Democratic counterpart, have been ticking their members on which tax measures they will support.
Meanwhile, Barras said the House on Thursday will also vote on a bill that would cut spending by $117 million by June 30 — cuts approved by the House Appropriations Committee on Wednesday over the objection of Democrats, who said the measure sliced too deeply.
“It’s going to be a long day,” Barras said.
Thursday’s votes are a response to Edwards’ proposal to close a $900 million deficit — inherited from Gov. Bobby Jindal — by raising $400 million in taxes, cutting $160 million in spending and using $328 million in patchwork funding.
Ending that $900 million shortfall will require a series of votes first in the House and then in the Senate and complex negotiations among lawmakers, the governor and outside interest groups.
Leaders in the Republican-controlled House added a key piece to the negotiating puzzle Wednesday when, after several days of delay, they sent Edwards a list of the structural budget changes they want him to accept.
Some Republicans have said it will be easier for Edwards to win approval for his proposed tax hikes — especially the penny sales tax increase — if he agrees to the Republican ideas, which aim to reduce government spending over the long term.
Edwards’ sales tax proposal would raise $220 million of the $400 million that he says is needed in new tax revenue. Other measures up for votes on Thursday would raise taxes on tobacco, alcohol, car rentals, and telephones, as well as reduce tax breaks for businesses and individuals.
LSU professor Jim Richardson, the state’s most influential economist, and Scott Drenkard, an economist for the Washington, D.C.-based Tax Foundation, have told lawmakers they ought to end tax breaks — known in tax parlance as broadening the base — and couple that with reducing tax rates.
Business lobbyists have filled committee rooms every day telling lawmakers to keep the tax breaks that benefit their clients.
Business groups say they want what Richardson and Drenkard recommend but are not lobbying lawmakers to do so. Instead, fearing the loss of tax breaks, “we’re all doing our best to swim to the life raft,” as one lobbyist put it.
The letter Republicans sent to Edwards on Wednesday calls for “tax reform,” “fiscal control,” making state government more “efficient” and changing the state pension system.
The letter asks that any tax increases approved during the special session remain in place only until revenue from “long term reform” is collected.
The Republicans also want to give the Legislature a greater say in how the state spends money on roads and bridges, and they want tax breaks to disappear unless reauthorized periodically by the Legislature. Those ideas are contained in House Bill 115, to be introduced during the upcoming regular legislative session.
Another Republican idea is to have Louisiana adopt an online system similar to one in Ohio, “which shows taxpayers exactly how their tax money is being spent.” The measure would improve transparency in state government, the letter says.
The document mostly lays out the Republicans’ ideas in generalities but does cite several specific bills that serve as potential models for Republican ideas.
Harris, R-Alexandria, oversaw preparation of the letter.
“We believe in these reforms,” Harris said in an interview. “We don’t want to keep coming in year in and year out having to deal with midyear deficits.”
Republicans hope to embody an agreement by both sides in a House Concurrent Resolution that would win approval before the special session ends on March 9.
Edwards and House Republicans would attempt to agree to the specific changes during the regular session that begins on March 14.
“He appreciates their willingness to work with him on a comprehensive package that stabilizes our budget in the short term, while building a solid fiscal foundation for our state for the long term,” the governor’s office said in a statement.
Pensions for state employees could be a sticking point. Edwards told The Advocate last week that he could not support pension changes that cost the state more money in the long term and that would run afoul of the IRS, which might have to approve any changes since state employees do not receive Social Security.
The Republican letter describes pension reform as “a cash balance or defined contribution plan for future employees.”
Follow Tyler Bridges on Twitter @TegBridges.
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