Perhaps the final two measures that could have generated big dollars for Louisiana’s budget problems went by the wayside Wednesday.
State Rep. Jay Morris said he would not attempt to revive a tax bill that could have raised up to $173 million per year.
Meanwhile, state Rep. Rob Shadoin withdrew a measure that could have cut spending by up to $1 billion per year.
Wednesday’s developments confirm what legislators have been saying privately in recent weeks – that the conservative, Republican-controlled House lacks the political will either to pass big spending cuts or big revenue-raising measures, in the regular session’s waning days, to address the state’s looming budget deficit.
Neither House Bill 609 by Morris, R-Monroe, nor House Bill 236 by Shadoin, R-Ruston, would have generated serious money for the budget that lawmakers are working to pass by June 8 when the Legislature adjourns.
Instead, both bills were aimed at addressing the so-called “fiscal cliff” that begins the following budget year, on July 1, 2018, when $1.3 billion in temporary taxes will disappear.
Speaker Taylor Barras, R-New Iberia, acknowledged last week that the House won’t cut spending and raise taxes enough during the regular session to head off the fiscal cliff, which was a major goal before the session began. The Legislature cannot raise taxes next year, so Gov. John Bel Edwards will have to call lawmakers into a special session sometime before July 1, 2018, to avoid hitting the fiscal cliff.
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The measures by Morris and Shadoin would have addressed part of the fiscal cliff in advance of the special session.
Morris’ bill sought to renew the sales tax on some 100 transactions that were previously exempt from taxation. It would apply to two cents of the state five-cent sales tax. (Local sales taxes mean that Louisiana’s combined local and state sales tax averages 10 percent, the highest in the country.)
The House soundly defeated Morris’ bill last week, and it did so after exempting sales taxes on utilities used in manufacturing, at the request of the Louisiana Chemical Association. That amendment meant that the bill, had it passed, actually would have raised substantially less than the original $173 million.
Morris had hoped to try again this week because he expected that Democrats, who voted against it in a parliamentary tactic, would now support it. After last week’s defeat, Barras said he had lined up the votes to pass the bill but didn’t know that the Democrats would oppose it.
“There’s no appetite for it,” Morris said in an interview Wednesday.
Shadoin sought to eliminate most of the “statutory dedications,” which means he sought to end the practice of having state dollars automatically flow into various trust funds without having to go through the annual budget process.
Shadoin and others – including the Louisiana Association of Business & Industry – say groups should be forced to defend their spending programs annually.
Had lawmakers passed Shadoin’s bill, those groups would have lobbied hard to have the Legislature restore the money next year. So Shadoin’s bill would have undoubtedly generated far less than the upward limit of nearly $1 billion.
Shadoin withdrew his bill on Wednesday in the face of certain defeat. It needed a super-majority of at least 70 votes to put it on the ballot for voters.
Stephen Waguespack, LABI’s president, has told groups throughout the state that legislators need to eliminate the statutory dedications, known inside the State Capitol as “undedicating” the funds. In an interview, Shadoin expressed surprise that LABI had failed to contact him or mount a lobbying effort to win support for his measure.
“There were a handful of bills to undedicate funds and members clearly know we support this policy,” Waguespack said in a text.
The measures offered by Morris and Shadoin were modeled on recommendations issued in January by The Task Force on Structural Changes in Budget and Tax Policy, a 13-member panel created by the Legislature last year.
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Shadoin also offered several tax measures recommended by the task force that died before the House Ways and Means Committee.
“As I understood it, when we left here last June, we were going to tackle budget and tax reform,” Shadoin said in an interview. “Therefore, I ran with some bills that were suggested by independent studies, and none of them have passed. I am disappointed that we have not handled the people’s business, as I thought we would.”
Morris said he felt no compunction to support the task force’s ideas.
“Some of the recommendations we take,” he said. “Some we don’t. As legislators, we have to pay attention to what our constituents want, not what just a hand-picked group of insiders say we ought to do.”