Senators said Monday they will stall efforts to clean up sales taxes unintentionally charged on items like school lunches and Girl Scout cookies, until lawmakers in the House agree to more taxes for next year’s budget than they’ve supported so far.
Sales tax increases passed in the chaotic final moments of a special session earlier this year swept in items that weren’t meant to be taxed. In the current tax session, Gov. John Bel Edwards proposed to remove those sales taxes imposed on things like tickets to school athletic events, donations to food banks, firefighting equipment purchases and prosthetic devices.
The House agreed to reverse those unintended sales tax hikes last week, passing that measure along with bills to raise $220 million-plus to fill budget gaps in the financial year that begins July 1.
The chairman of the Senate tax panel, Sen. JP Morrell, said his Revenue and Fiscal Affairs Committee doesn’t intend to advance cleanup measures until the House sends over more tax bill options.
“We’re not looking for a specific number,” said Morrell, a New Orleans Democrat. “We’re looking for revenue streams and revenue streams that we’re sure will generate money.”
The Senate’s plan to tie the cleanup bill to the tax hikes hadn’t been shared by midday Monday with House leaders.
“That’s disappointing. Good God, I didn’t get that message,” said House Speaker Taylor Barras, R-New Iberia, when asked for his reaction.
The governor, a Democrat, is seeking $600 million in new revenue for next year’s budget. He says that’s needed to adequately fund the TOPS college tuition program, the safety net hospitals for the poor, college campuses, K-12 education and other government services.
Sen. Karen Carter Peterson, D-New Orleans, said the majority-Democrat Senate Revenue and Fiscal Affairs Committee shouldn’t move legislation exempting any groups from taxes “before we identify the money to pay for the things we need.”
The majority-Republican House Ways and Means Committee has bottled up many of the governor’s tax measures, with GOP House leaders resistant to more taxes to balance the budget. Business groups and the state Republican Party are pushing against the tax hikes.
Senators are limited in their work because tax increase measures must start in the House.
Barras said while he understands the Senate’s push for additional revenue, he’s not sure other tax proposals can gain House support.
He said one measure may “still have some play in it,” a bill that would decrease an income tax break given to upper-income earners, by cutting breaks for taxpayers who itemize deductions on their income tax returns.
The proposal, which would raise an estimated $117 million next year, was stalled in the Ways and Means Committee by a one-vote margin. Barras said he’s “not necessarily against” some version of that bill reaching House floor debate.
The Senate Revenue and Fiscal Affairs Committee also is sitting on another bill while awaiting action from the House, the state’s multibillion-dollar construction budget for the financial year that begins July 1.
Morrell said committee members were concerned the House sent the budget without a separate bill that provides the financing to pay for it.
The special session must end June 23.
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