The state Senate leadership decided Monday not to restore a tax break for the sale of Girls Scout cookies or for tickets to high school football games — until the Louisiana House raises more money.
The Senate is stalling legislation favored by all lawmakers in an attempt to pressure the House after the House last week raised less than half of the $600 million that Gov. John Bel Edwards says is needed to prevent deep cuts to the TOPS scholarship program, K-12 schools, the state’s colleges and universities, safety-net hospitals and other programs.
The House, after some two hours of behind-the-scenes maneuvering, took up only one small tax bill Monday. House Bill 50 would trim a deduction for capital gains taxes. How much the measure would raise is not clear.
In a more significant move, the House allowed the Ways and Means Committee to consider a key tax bill on Wednesday dealing with the itemization of federal taxes. The committee narrowly defeated a similar measure last Wednesday.
Rep. Malinda White, D-Bogalusa, is the sponsor of the measure, House Bill 38, that the committee will consider Wednesday. To win passage, White said in an interview, the bill would be amended to sunset in 2018 and make sure that individuals would continue to be able to take deductions for charitable contributions and for their mortgage interest payments.
Meanwhile, the Senate Revenue and Fiscal Affairs Committee Monday did not approve measures that would restore a couple of dozen sales tax exemptions for nonprofits that the Legislature inadvertently removed during the last-minute rush to pass legislation during the first special session in March.
Since April 1, for example, the Girls Scouts have had to charge state sales taxes on the sale of cookies and schools have had to charge sales taxes on tickets for high school sports events — after legislators passed a measure in March that mistakenly eliminated a sales tax exemption for these and other transactions involving nonprofits.
State Sen. JP Morrell, D-New Orleans, told a roomful of lobbyists on Monday that the committee, which he chairs, would not restore the tax exemptions as expected.
“I would like to correct several of our problems, including taxing Girl Scout cookies,” Morrell said. “You can’t really correct the Girl Scout cookie problem if you don’t have any money to pay for health care or higher education.”
A majority of the committee members said in interviews afterward that they backed Morrell’s position, and so did Senate President John Alario, R-Westwego.
“You can’t give away a lot of exemptions unless you have the revenue to replace those losses,” Alario said.
No one could say Monday how much it would cost the state to restore those tax exemptions.
With its decision, the Senate leadership is siding with Edwards, who has expressed dissatisfaction that the tax measures approved by the House last week would raise only about $222 million of the $600 million for next year that the governor says is needed.
The Senate’s strategy caught House Speaker Taylor Barras by surprise.
“That’s disappointing, good God,” Barras, R-New Iberia, told reporters when informed of the Senate leadership’s decision. “I didn’t get that message.”
Apparently the governor’s best hope for raising more taxes would be White’s HB38. It would limit the deduction on state income taxes that individuals can claim from the itemized deductions they take on their federal tax returns that are in excess of the federal standard deduction — a move that would make middle- and upper-income taxpayers pay more.
A similar measure, House Bill 11, was defeated in Ways and Means on a 10-9 vote on Wednesday.
The committee chairman, state Rep. Neil Abramson, D-New Orleans, cast the tie-breaking vote to defeat HB11. In an interview afterward that day, he said he feared that the bill would raise taxes on low- and middle-income taxpayers because of amendments added to the bill.
Abramson said then that he was “unlikely” to vote for a clean version of the bill if it didn’t protect two key deductions — for mortgage interest payments and charitable contributions. So it appears that Abramson might support White’s bill if it is amended to offer those protections. He walked away from a reporter who attempted to ask him about it on Monday.
Eight of the nine University of Louisiana campus presidents came to the House Monday to lobby for House Bill 38, as did LSU Chancellor F. King Alexander and Richard Lipsey, who chairs the Board of Regents, which oversees the entire higher education system. The institutions are facing a $55 million cut in spending — after eight years of spending cuts — and are facing a $150 million shortfall in funding TOPS at the same level next year as during this year.
In the meantime, the Senate Revenue and Fiscal Affairs Committee also refused to approve House Bill 2 — which authorizes the state’s construction projects — until the House passes companion legislation, House Bill 3.
This decision reflects the widespread anger in the House toward Abramson, who bottled up HB2 on the final two days of the regular legislative session earlier this month rather than give the House the chance to approve the Senate’s version of the bill.
The House approved another version of HB2 last week — the one that the Senate committee is now sitting on.
In one other development Monday, state Rep. Chris Broadwater did not seek a vote on his tax measure, House Bill 27, which aims to address a Louisiana Supreme Court ruling that threatens to allow manufacturing companies to avoid millions of dollars in taxes to the state and to parish governments.
Broadwater said the Louisiana Chemical Association and other trade groups are trying to kill the bill, saying that his bill would go beyond the supreme court ruling and impose additional taxes on companies. Lobbyists from the chemical association have threatened Broadwater with attack radio ads, he said, adding that he asked the association on Wednesday, after Ways and Means approved his bill, to draft an amendment that would limit his bill to just addressing the supreme court ruling – an amendment that is not yet forthcoming.
“Apparently they spent all their time working on radio spots in opposition to the bill instead of drafting an amendment to endure revenue neutrality,” said Broadwater, R-Hammond.
Follow Tyler Bridges on Twitter @TegBridges.
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