Measures that would raise more revenue to help plug the state’s $1.6 billion projected budget deficit will get their first hearing in the Louisiana Legislature on Monday before the Senate tax-writing panel, its chairman said Wednesday.
State Sen. Neil Riser, R-Columbia, who chairs the Revenue and Fiscal Affairs Committee, said he won’t decide until Friday which measures will be on Monday’s agenda.
Businesses throughout Louisiana — and their trade associations’ lobbyists in the State Capitol — will be extremely interested to see which bills are heard first because that could indicate which businesses or industries are the likeliest targets.
State Rep. Joel Robideaux, R-Lafayette, is also keenly interested to see what Riser’s committee does.
Robideaux chairs the House Ways and Means Committee, which will begin to hear tax bills on Tuesday.
Even Republicans are saying they expect the Legislature to ask businesses to pay more taxes, given the size of the deficit and the desire to limit cuts in state aid given to the state’s colleges and universities. As The Advocate reported late last year, tax breaks for six major programs alone cost the state $1.08 billion in 2014, up from $207 million in 2004.
The Senate’s decision to begin to take up the tax measures first comes as something of a surprise because, under the state constitution, “All bills for raising revenue or appropriating money shall originate in the House of Representatives.”
In an interview, Riser said increases in taxes on cigarettes, gasoline and the like must start in the House, namely the Ways and Means Committee. But trimming tax breaks or repealing tax rebates can begin in the Senate, he said.
“Either a temporary or permanent repeal of a tax credit or a rebate is affecting an expenditure of the state,” Riser said. “We can take that money and give it to the people of Louisiana.”
Senate Secretary Glenn Koepp, who advises the Senate president on procedure and rules, seconded Riser’s interpretation. “A tax rebate is an expenditure of money, so if you take that rebate away, you’re taking away that expenditure and reallocating it somewhere else,” Koepp said.
C.B. Forgotston, who as a senior staff member helped draft the rewrite of the state constitution in 1973, disagreed with the interpretation of Riser and Koepp, saying the constitution is clear that these bills must start in the House.
Ultimately, whether the Senate can move forward on these bills will be up to Senate President John Alario, R-Westwego. Riser’s committee would not be hearing the bills without Alario’s approval.
The senator taking the lead in trying to raise more revenue is Robert Adley, R-Benton. Adley is sponsoring a measure for Gov. Bobby Jindal that would raise $526 million by taking away refunds given to businesses for 12 different taxes, most notably the inventory tax.
Adley said he detects minimal interest in the Legislature for the measure, which is Senate Bill 126, saying Jindal’s unpopularity in the state and frayed ties with legislators have weakened his hand.
Adley also is promoting Senate Bill 85, which is a proposed constitutional amendment that would repeal outright the inventory tax.
Doing so would raise $452 million for the state — if approved first by the Legislature and then by voters — but also would cost local governments an equivalent amount of money because they keep the tax revenue from the businesses while rebates given for the tax come from the state treasury. Businesses actually receive far more in rebates than what they pay to the government.
To repeal the inventory tax, Adley said, the Legislature would have to create new ways for local governments to raise revenue.
“Instead of telling them we want to take away all of their money, we also want to find a way for them to come up with extra money,” Adley said.
But in a measure of the difficulty that legislators face, repealing the inventory tax would only partially help fill the projected $1.6 billion budget gap because the budget has to be balanced by July 1 and voters could not repeal the inventory tax until the fall.
Robideaux said he and his committee members want to see whether the Revenue and Fiscal Affairs Committee will attempt to repeal the inventory tax on Monday.
Follow Tyler Bridges on Twitter, @TegBridges. For more coverage of the State Capitol, follow Louisiana Politics at http://blogs.theadvocate.com/politicsblog/.