Louisiana drivers only have to renew their licenses every six years beginning Wednesday, but they’ll have to pay more when they buy a car or seek a copy of their driving record.
Those changes are among the new state laws that take effect July 1, along with a new 50-cent-per-pack tax hike on cigarette smokers and scaled-back tax breaks for businesses.
Wednesday marks the beginning of a new state budget year, so many of the laws that hit the books impact the state’s finances.
CHANGES FOR DRIVERS
Previously, drivers had to renew their licenses in Louisiana every four years. But lawmakers agreed last year to change the renewal period to six years, saying it could help lessen wait times at the Office of Motor Vehicles.
They gave the motor vehicles agency a year to make the necessary system adjustments. With the change, the fee for a basic license is rising from $28.50 to $42.75 to cover the extra years of renewal. Fees for other licenses also will increase.
Meanwhile, car buyers and sellers will pay $50 more for vehicle and salvage titles, boosting the fee to $68.50. And the price tag for getting an official state driving record is rising from $6 to $16. Those fee hikes are estimated to bring in an extra $82 million a year for the state treasury, to help balance the budget.
HIGHER COSTS FOR SMOKERS
Smokers will pay more for a pack of cigarettes, one of several tax changes that lawmakers used to balance the $24.5 billion state budget that pays for agencies and services in the 2015-16 fiscal year starting Wednesday.
A 50-cent tax hike is boosting the per-pack tax rate to 86 cents, and a new tax is being levied on electronic cigarettes and vapor products.
The tobacco tax hike is estimated to raise more than $106 million a year, dollars that are dedicated to help pay for health care services in the state Medicaid program.
FEWER SUBSIDIES FOR BUSINESSES
Lawmakers lessened a wide array of tax breaks with the start of July, to help drum up revenue for the state budget and avoid steep reductions to public health care and colleges.
The state’s payment on film tax credits is capped at $180 million annually for the next three years, and other business subsidies are scaled back by 20 percent, 25 percent and 28 percent across the board through June 2018. Louisiana’s solar tax credit is becoming less generous, and a 1-cent sales tax exemption on business utilities is temporarily suspended.
Companies affected by the tax changes are threatening lawsuits, particularly in the film industry, which claims the cap will cause heavy damage to Hollywood South.
Louisiana is expected to spend about $560 million less on tax breaks in the budget year because of the changes.
NEW REVIEW FOR CONSULTING CONTRACTS
Lawmakers have new approval authority over consulting contracts signed across state agencies, part of an effort to combat wasteful state spending.
Most consulting and professional services contracts with a state price tag topping $40,000 a year will be subject to review. If the Legislature’s joint budget committee doesn’t request a review within 30 days from receiving the information, the contract will be deemed approved. If the committee rejects or reworks a contract, savings go to a higher education fund.
The authority expires in July 2018 and doesn’t cover certain health care, elections and other contracts.