Louisiana Spotlight: Another budget crisis, more financial uncertainty likely again next year _lowres

Associated Press star reporter Melinda Deslatte in Baton Rouge, La., Monday, April 13, 2015. (AP Photo/Gerald Herbert)

Sloppy and incomplete. If only a few words could sum up the just-ended special legislative session, those would suffice.

State lawmakers didn’t finish filling the budget holes, made little headway on the discussion of large-scale tax reform and struck such a divisive tone that the spill-out effects could linger for months.

They get little reprieve. The Louisiana Legislature opens its three-month regular session Monday.

Democratic Gov. John Bel Edwards and the majority Republican Legislature couldn’t agree on the types of taxes they would support to rebalance this year’s budget and bail out next year’s budget. House Republicans bottled up many measures sought by the governor. Senators who were more open to taxes were constrained because most tax bills must start in the House.

Negotiations between the House and Senate became so tense that by the end of the session an emotional Senate President John Alario, R-Westwego, described himself as disgusted and told his senators: “We’re going to have some serious conversations with the other body in how this is supposed to be conducted.”

Gaps remain in this year’s budget. With $170 million in cuts, $400 million in patchwork financing and more than $300 million in taxes, lawmakers whittled the hole from around $900 million to a more manageable amount.

The final tally of the shortfall wasn’t yet settled, as analysts dug through the implications of bills passed Wednesday in the near-panicked closing minutes of the session.

Work on next year’s budget shortfall, initially pegged at $2 billion, was far from complete. The gap for the budget year that begins July 1 is estimated to be as large as $800 million, after the tax hikes that won passage.

Again, people who rely on the state for health services and college leaders will be left begging for a solution to keep them from damaging cuts. But lawmakers can’t raise taxes in the regular session, causing talk already of another special session possibly for June.

Meanwhile, the largest tax hikes that lawmakers used to close budget gaps come with 27-month expiration dates, creating another financial cliff that threatens to decimate services when more than $1 billion in sales taxes fall off the books.

“After seven years of legislators complaining about the previous governor ‘kicking the can down the road,’ they themselves kicked it again,” the nonpartisan Council for A Better Louisiana said in its session summary.

Lawmakers agreed to permanent tax increases on alcohol, cigarettes, phone service, car rentals, certain business activities and short-term room rentals through Airbnb.

The biggest-ticket tax hikes, however, last until mid-2018. The temporary taxes include a 1 percent increase to Louisiana’s 4 percent sales tax and the lessening of many sales tax exemptions, like on business utilities and the purchase of manufacturing equipment.

Expiration dates were pushed by lawmakers who say they want to craft sweeping tax changes in 2017, to make Louisiana’s tax code fairer and less riddled with exemptions that carve out benefits for favored groups.

Republicans also say Louisiana needs to make structural changes to how it spends its money. But efforts to make such changes in the special session fizzled — in a House and Senate led by Republicans.

Attempts to unlock budget protections that limit where lawmakers can make cuts stalled. Proposals to force reductions in state contracts fell apart in favor of a more general review, and GOP lawmakers acknowledged that while they could find savings, it wouldn’t bail out the budget. And after talk among House Republican leaders about needing to cut government, they had trouble coming up with far deeper cuts than Edwards proposed.

Lawmakers did create a Task Force on Structural Change in Budget and Tax Policy to make recommendations. House Speaker Taylor Barras, R-New Iberia, said the review would help lawmakers get educated and develop reform ideas.

“They need more discussion. They need more time,” Barras said.

For years, Louisiana’s leaders have refused to match the state’s spending to its yearly income by either increasing taxes or deeply cutting spending. Neither idea has gained traction. In the special session, lawmakers again delayed on making those long-term decisions.

Melinda Deslatte covers Louisiana politics for The Associated Press.