Now it’s the state Senate’s turn.
On Monday, the Senate Revenue and Fiscal Affairs Committee will take up 11 tax measures passed by the House on May 7 that would add a total of $615 million to the state’s tax collections next year.
House and Senate leaders say it is crucial that the committee pass the measures as the next step to fashioning a budget that prevents deep cuts to Louisiana’s public colleges and universities and to its health care system.
Without new revenue, the Legislature would have to approve $1.6 billion in cuts — 20 percent of the state general fund — from the level at which state programs were funded this year.
“People around the state don’t want to see universities closed and health care reduced,” said state Sen. Neil Riser, R-Columbia, the committee’s chairman.
The Louisiana Association of Business and Industry, the powerful business lobby, will continue to object to nearly all of the measures.
“I would love to go to the Legislature to say there is no detrimental impact by making businesses pay more,” said Stephen Waguespack, LABI’s president. “I cannot say that.”
The measures before the panel would raise the cigarette tax by 32 cents per pack, limit the subsidies for the film and solar energy industries, and cut a host of other business tax breaks by 20 percent.
Even the $615 million in tax hikes approved by the House mean the Legislature is still facing the need for $1 billion in cuts in next year’s budget unless lawmakers raise additional tax revenue, one way or another.
The House Appropriations Committee approved a budget last week that directs nearly all of the $615 million to colleges and universities to give them as much money in 2016 as they are getting this year. That move means, however, that their state aid still would not keep pace with inflation.
By favoring higher education institutions, the House’s plan leaves the public health care system about $200 million short in state aid and $500 million to $600 million short in terms of services when matching federal dollars are factored in.
The budget likely will be amended when the full House considers it on Thursday, but whether health care providers will get more money is not yet known.
The first question to be faced by the 11 senators on the Revenue and Fiscal Affairs Committee on Monday is whether they will approve all 11 House-passed tax bills.
“We intend to pass those measures,” said Senate President John Alario, R-Westwego, who after 43 years of counting votes in the Legislature has honed the practice to an art.
The second question is whether the committee will amend any of the 11 measures to seek more money.
“I don’t have any expectation of the committee finding more revenue,” Alario said. “We don’t have a lot of people anxious to raise taxes in the Senate.”
Alario’s comments come as something of a surprise because the Senate traditionally has been more willing to raise revenue than the House. However, his comments may simply reflect a negotiating tactic at this point because Alario also said he is hoping the House will pass one or two more major tax bills.
Some Capitol insiders have expected the Revenue and Fiscal Affairs Committee to take the 32-cent proposed increase in cigarette taxes and raise it even higher.
Alario said he isn’t counting on that.
“We could lose votes in the House” that way, he said, because the higher rate would require the House’s approval through a two-thirds vote.
Once the Revenue and Fiscal Affairs Committee takes action on the 11 bills, those that are approved will then have to win passage in the Senate Finance Committee before reaching the Senate floor. If approved there, any bills that have been changed at any point on the Senate side would have to return to the House for approval.
Senators have applauded House Speaker Chuck Kleckley, R-Lake Charles, and other House leaders for shepherding the $615 million package of tax measures through the House.
Kleckley said House leaders still hope to pass House Bill 768 by Rep. Jay Morris, R-Monroe, which would raise another $231 million next year by eliminating all the tax exemptions that have been created over the years for 1 cent of the 4-cent state sales tax. They did not have the 70 votes needed to pass that bill on May 7 because of opposition from anti-tax Republicans.
“I’m clearly watching Jay’s bill to see how it fares,” said Sen. Robert Adley, R-Benton, who has been the most aggressive senator in trying to find ways to raise more revenue for next year. “It’s a lot of money.”
Adley is also hoping that the Ways and Means Committee will approve House Bill 751 by state Rep. Joel Robideaux, R-Lafayette, which would limit the 1 percent tax break that companies get for paying their sales taxes on time.
Adley also hopes to limit tax breaks that companies get for paying sales taxes on tobacco and motor fuels on time. Altogether, those measures could raise $35 million per year, Adley believes.
Tim Barfield, Gov. Bobby Jindal’s point man on taxes, said he believes legislative leaders are getting closer to settling on a budget plan that does not include a net tax increase and thus would not invite a gubernatorial veto.
In the meantime, “we definitely have concerns that there are tax increases without (tax) offsets,” Barfield said.
One of the offsets likely to begin moving through the legislative process is a measure that would phase out the corporate franchise tax. Ways and Means on Tuesday will take up that measure, House Bill 828, which is sponsored by state Rep. Cameron Henry, R-Metairie.
Normally, phasing out a tax would cost money in the short term, but HB828 could actually create more revenue for the state next year under complex rules created by the anti-tax Americans for Tax Reform group that Jindal is strictly following.
Jindal has said he would veto a budget that includes only the tax measures approved thus far because the Legislature has not approved corresponding tax reductions.
In a complicated maneuver, phasing out the corporate franchise tax — which is a tax on the net equity of a company’s investment in Louisiana — could be counted as a tax reduction that would permit Jindal to accept an equivalent amount of tax increases.
Follow Tyler Bridges on Twitter, @TegBridges. For more coverage of the State Capitol, follow Louisiana Politics at http://blogs.theadvocate.com/politicsblog/.