In something of a political Hail Mary, the chairman of the state House Transportation Committee said he plans to file legislation that would dramatically boost state aid for roads and bridges without increasing Louisiana's gasoline tax.
Rep. Kenny Havard, R-St. Francisville, said he is preparing a bill that would impose a $1.5 billion hydrocarbon processing tax on Louisiana's 17 refineries to assist transportation and other state services.
"It will be a significant amount of money," Havard said. "There will be money to fundamentally change how we budget in Louisiana."
However, similar efforts have died for decades, and Havard's proposal faces daunting political and legal hurdles.
Chris John, president of the influential Mid-Continent Oil & Gas Association, said Friday his group had multiple conversations with Havard about his idea. A former U. S. congressman from Crowley, John said the plan has constitutional problems, would unfairly single out 17 refineries to address a statewide problem and would put refineries here at a disadvantage with those in Texas and elsewhere.
"It is a non-starter with us," he said.
Havard said his proposal will be an alternative to bills based on Gov. John Bel Edwards' transportation task force report, which said the state needs a $700 million per year increase in state aid for roads and bridges.
A plan to raise taxes and fees by $700 million per year for roads and bridges won final appr…
The panel, which included Havard, said state gasoline taxes are the most reliable sources for transportation dollars.
But the lawmaker noted that it would take an increase of 23 cents per gallon – more than double the current state gas tax – to come up with $700 million, which he said is not politically feasible. "I have been saying all along to the task force we need other options," Havard said.
Motorists pay 38.4 cents per gallon in state and federal gasoline taxes, including a 20-cent state levy.
Edwards said earlier this week that a $700 million increase for transportation would be difficult to get through the Legislature amid widespread budget problems.
Gov. John Bel Edwards said Wednesday state budget problems mean it would be "very difficult"…
The 2017 regular legislative session starts on April 10.
Havard said he is preparing legislation that would impose a hydrocarbon processing tax at the refinery level. Processing refers to activities that change oil or natural gas. Crude oil that enters Louisiana refineries leaves as gasoline or other products, which would then be taxed, perhaps one cent per gallon under Havard's plan.
"If you process 400,000 barrels a day that is 42 gallons per barrel," John said. "You do the math, and whatever the tax on it that is what the refinery would pay and that would put them at a huge disadvantage."
"No other state has such a tax for a lot of reasons, mainly because it is not legal," John added.
Similar plans have been tried and failed since the Treen administration in the early 1980s. Public Service Commissioner Foster Campbell made a $5.5 billion processing tax plan on oil and natural gas the centerpiece of his 2007 bid for governor.
Just two years ago former Sen. Ben Nevers, who is now Edwards' chief of staff, and state Rep. Harold Ritchie, both Bogalusa Democrats, proposed a constitutional amendment to enact a hydrocarbon processing tax.
Transportation, colleges and universities and public schools were supposed to be among the beneficiaries but the legislation went nowhere.
While a special panel named by Gov. John Bel Edwards has called for $700 million a year in …
Havard conceded that initial talks with industry officials have not been encouraging.
"I said 'Look, I am begging you, come to the table, let us make it a win-win for you and the state of Louisiana,'" he recalled.
"I am appreciative of Exxon and the refining industry," Havard said. "It is not a shot at them."
The lawmaker said he has talked to Edwards about his proposal and planned to meet Friday with Revenue Secretary Kimberly Robinson, also a task force member.
John criticized the plan.
"To identify and single out a segment of an industry for statewide transportation is not fair," he said.
Shawn Wilson, secretary for the state Department of Transportation and Development and co-chair of the task force, said Friday he would not say no to any potential revenue-raising stream for transportation.
"There is no monopoly on good ideas," Wilson said. "I appreciate Chairman Havard for not just participating as a listener, but he has an idea that is worth vetting."
John said while Havard's plan is "dressed up" it is similar to previous processing proposals that have failed for years.
"You can put lipstick on that pig but it is still a processing tax," he said.