Voters will get to decide on a constitutional amendment to make permanent an expiring 4-cent cigarette tax that is attached to a plan to dedicate more tobacco settlement dollars to merit-based TOPS scholarships.
The proposal combines Gov. Bobby Jindal’s TOPS plan with the same hotly debated cigarette tax renewal that the governor had vetoed. The tax renewal was resurrected by the Louisiana House as an amendment to the TOPS plan.
The state Senate voted 38-0 and then the House approved Senate Bill 53 on a 99-4 vote Thursday in the final half-hour of the legislative session to send the constitutional amendment to voters Oct. 22 in a 16-line ballot measure.
“This piece of legislation is a combination of two good policies,” said House Speaker Jim Tucker, R-Tucker. “It’s going to be a landmark piece of legislation.”
Tucker said he expects “overwhelming” voter support because the public supports the Taylor Opportunity Program for Students and because most people do not want to lower the sales taxes on cigarettes.
The House last week tacked the cigarette tax onto the TOPS plan, against Jindal’s wishes. But Jindal said he considered the TOPS proposal too important to risk sacrificing.
A six-person legislative conference committee finalized tweaks to the legislation Thursday before the House and Senate approved it.
The two chambers also approved the enabling language, Senate Bill 52. State Sen. John Alario, R-Westwego, sponsored SB52 and SB53.
The TOPS constitutional amendment is a Jindal plan to permanently set aside more dollars each year for the popular TOPS scholarships, which pay college tuition for qualified students. The plan would not necessarily increase overall TOPS funding though.
By using the Jindal-backed SB52 and SB53 as the vehicles, state Rep. Harold Ritchie, D-Bogalusa, revived his cigarette tax renewal last week that had previously been vetoed by Jindal. The governor has argued that a tax renewal is the same as a tax increase.
Although just a renewal of 4 cents, which collects $12 million annually, the proposal has been one of the session’s most debated and controversial.
If approved, the constitutional amendment would keep the cigarette sales tax at 36 cents per pack. The 4 cents in the renewal would go to the state’s Health Excellence Fund for health-care services and programs.
A tax bill is supposed to start in the House, but the cigarette tax was actually amended onto Senate bills. Alario said he believes the conference committee clarified the issues though.
State Sen. Robert Adley, R-Benton, said if people want to legally challenge the proposal they should do so before the Oct. 22 vote when it could be written into the state Constitution.
TOPS costs the state $134 million annually. At the state’s public universities, TOPS pays tuition and some fees. Because of anticipated tuition increases this fall, state government would have to pay as much as $150 million or so for TOPS next year.
Jindal’s plan would protect for TOPS $43 million additional dollars — making a total of $58 million available that could not be spent elsewhere. Currently, only $15 million is dedicated to TOPS. The rest of the costs for TOPS come from state general fund dollars.
The state receives about $58 million each year from the Tobacco Settlement — 25 percent goes to the Louisiana Fund for health-care expenses and 75 percent goes to the Millennium Trust Fund, which totals $1.38 billion.
The constitutional amendment would cap the Millennium Trust Fund at $1.38 billion and any funds in excess of that amount will be dedicated toward TOPS.
After the initial $43 million, the plan will increase the dollars by an additional $70 million once the bonds are paid off from 2018 to 2030.
The Millennium Trust Fund allocates money to TOPS, the Education Excellence Fund and the Health Excellence Fund, which would further benefit from Ritchie’s amendment.