In rapid-fire fashion Tuesday, the Louisiana House’s tax-writing panel sent tax bill after tax bill to the full House for an up-or-down vote later this week.
The Ways and Means Committee forwarded 31 bills — some with a favorable recommendation, some with an unfavorable recommendation — to the House without any debate on the pros or cons of each one and without committee members taking a recorded vote.
Gov. John Bel Edwards released a statement afterward, praising the committee’s move because it meant his tax measures — which he says are needed to prevent crippling budget cuts — remain alive.
But what the Ways and Means Committee’s actions really meant was not clear because all the measures it forwarded need the same number of votes to advance to the Senate, whether they received a favorable or an unfavorable recommendation from the panel. Bills that would suspend tax credits or exemptions need 53 votes, while bills that would repeal tax credits or would raise taxes need 70 votes in the 105-member chamber.
Tuesday’s actions left unanswered the key question going into the committee hearing: Are House lawmakers — especially Republicans — willing to approve new taxes?
That question will begin to be answered Thursday, when the full House takes up the tax measures.
Rookie House Speaker Taylor Barras, R-New Iberia, was plotting strategy late into the evening the night before and delayed the start of Tuesday’s committee meeting while he met with the chairman, state Rep. Neil Abramson, D-New Orleans.
So why didn’t the Republican-controlled panel just kill the bills it opposed on Tuesday?
“We’re giving everybody in the House the chance to look at it and vote on it,” Rep. Jim Morris, R-Oil City, the committee’s vice chairman, said in an interview.
Bills that received a thumbs-up from the committee would increase the state sales tax by one penny and raise $220 million by June 30 (House Bill 62); increase the tobacco tax by 22 cents to $1.08 and raise $16 million by June 30 (House Bill 14); increase the tax on telephone and cellphone calls to 5 percent and raise $3 million by June 30 (House Bill 72); impose a 2.5 percent state tax on car rentals and raise $800,000 by June 30 (House Bill 39); and increase the tax on alcohol — beer, wine and spirits — and raise $6 million by June 30 (House Bill 27).
Edwards is pushing each of these bills as part of his effort to raise $400 million in new tax revenue (not $350 million, as previously reported) as part of a three-pronged plan to close a $900 million shortfall by June 30. Edwards also is proposing to cut at least $160 million in government spending and use $328 million in funds available only this year.
The committee also gave a thumbs-up to another Edwards-backed bill (House Bill 55) that would attempt to make companies pay higher taxes by limiting their ability to shift income earned in Louisiana to another state to lower their Louisiana tax bill. Another Edwards-backed bill (House Bill 59) that got a thumbs-up would extend existing taxes on hotel and motel rooms to short-term rentals, such as Airbnb, that are now exempt from those taxes.
The Ways and Means Committee gave a thumbs-down to four bills (House Bills 22, 23, 24 and 64) that would make businesses pay higher taxes. The bills would make permanent a temporary reduction in business tax breaks that the Legislature imposed last year. Because the votes were only recommendations, the full House still can vote on these measures.
The Ways and Means Committee also gave a thumbs-down to measures that would no longer allow taxpayers to deduct their federal tax payments on their state tax returns (House Bill 31); that would no longer allow taxpayers to take a full deduction on their state tax returns from their federal excess itemized deductions (House Bill 33); and that would require taxpayers to begin paying higher tax rates at lower income levels (House Bill 32).
All three measures — which still could win approval because they were forwarded to the full House with an unfavorable recommendation — would make Louisiana’s tax system more progressive by taking a bigger bite out of higher-income taxpayers. Under Louisiana’s regressive tax system today, the poor pay a higher percentage of their income in taxes.
The Ways and Means Committee has more work to do, with plans to hear bills on Wednesday that would eliminate nearly 200 tax exemptions on sales taxes, among other measures.
The committee took action on 37 bills in a mere 80 minutes Tuesday as none of the 19 members sought to debate or question the motion on what the panel should do with each bill.
Afterward, Abramson said he had privately told the committee members beforehand that they were free to voice their views during the hearing but that he didn’t think it was necessary because they had spent a week getting testimony and debating all of the measures.
Of the 20 bills that got a favorable recommendation, 11 are sponsored by Democrats and nine by Republicans. Democrats sponsor all 11 bills that got an unfavorable recommendation.
Abramson added that the committee’s decision of whether to make a favorable or unfavorable recommendation on each bill sends a signal to the full House.
“I think the House will look to see what the committee did,” Abramson said in an interview, “but I expect each member to do what he or she thinks is the best thing to do.”
The decision to forward nearly all of the bills left some observers unimpressed.
“Today was nothing more than a procedural punt to the House floor,” said Stephen Waguespack, president of the Louisiana Association of Business and Industry, the state’s most powerful business lobby.