The Louisiana Senate on Tuesday rejected a proposed doubling of the earned income tax credit.
The tax credit is a benefit for working people who have low to moderate income. It reduces the amount of taxes owed and may result in a tax refund.
The House had added the potential $44.7 million tax credit as a rider to a revenue raising bill sponsored by state Sen. Robert Adley.
Adley objected when the measure - Senate Bill 93 - came up for concurrence in the House change.
The Benton Republican said legislation meant to save the state about $4 million had ballooned to a $45 million cost.
“We are trying to finalize this budget. To spend $45 million off the top is a mistake,” Adley said.
But state Sen. Karen Peterson asked senators to go along with the change.
“It helps all the poor people in the state. We give a lot of tax breaks to the wealthy,” said Peterson. “It’s an attempt to balance some of the money we have been giving away for years to business.”
The New Orleans Democrat said the provision also helps offset some tax increases which budget-balancers are trying to do to meet Gov. Bobby Jindal’s requirement. Jindal and some legislators have signed an Americans for Tax Reform pledge of no “net” increase in taxes.
“I’m just trying to help the folks with their own pledge,” said Peterson.
Fifteen senators voted to accept the House change while 23 voted against it.
The Senate then voted 31-6 vote against the earned income tax credit, sending the measure to a House-Senate conference committee to strip the provision.
Adley’s original SB93 would ban the $25 credit for educational expenses for each child attending elementary and secondary school if the tax deduction for payment of tuition and fees is taken.