After years of special sessions and temporary budget patches, the Louisiana Legislature appears to be on track to shore up the state's finances through at least 2025, with the House passage Friday of a sales tax deal that has eluded the chamber in two prior special sessions this year.
House Bill 10, approved on a 74-24 vote, would set the state sales tax rate at 4.45 percent on July 1 by extending nine-twentieths, or .45, of a 1 percent tax hike that would otherwise expire.
"We're not over the goal line today but we are so much closer," Gov. John Bel Edwards said after the House vote.
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The proposal must still be vetted by the Senate this weekend, but leaders say they expect the upper chamber to quickly agree to the House version of the bill.
"The House did a good job today in sending us some instruments that will solve the problem at hand," said Senate President John Alario, R-Westwego.
Edwards said he's hopeful the special session can end as soon as Sunday evening – ahead of its 6 p.m. Wednesday deadline. Special sessions cost taxpayers about $60,000 a day.
Until Friday, the conservative GOP-controlled House had consistently rejected previous sales tax proposals. Two past special sessions this year collapsed in disagreement over how much of the 1 percent sales tax to renew to address the fiscal cliff the state faces when more than $1 billion in temporary tax measures expire June 30.
The House had reached what House Speaker Taylor Barras called an "extreme deadlock" over whether to renew half or two-fifths — teetering on the edge of another collapse over a tenth of a penny — before the down-the-middle proposal was hashed out Friday.
"Compromise is never easy," said Rep. Paula Davis, a Baton Rouge Republican who sponsored the bill. "Not all Republicans are happy with this, not all Democrats are happy and not all independents are happy."
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There were no questions on the bill and little discussion before the vote, though there was a brief dramatic moment when Rep. Raymond Crews, R-Shreveport, attempted to amend HB10 to alter the timeframe so that the state sales tax to go from 5 percent to 4 percent on July 1 and then 4.45 percent on August 1 to illustrate effect of the tax renewal.
Standing at the side of the House floor podium, Davis sternly told Crews that she did not want the amendment attached to her bill. Other members quickly gathered around and implored Crews to withdraw his proposal because it surely would have killed the bill.
The move recalled the theatrical end to the last special session when Rep. Alan Seabaugh, R-Shreveport, filibustered against second attempt at a sales tax measure with minutes left in the session.
Edwards said he and Barras, R-New Iberia, met Friday morning and set out to build the bipartisan 70 votes needed to pass a tax measure in the House this time around.
It will generate about $40 million less than the $506 million in priorities that legislators had left unfunded in the budget that begins July 1, so some cuts will be made.
Louisiana House members find themselves in a familiar position with just days to go in the third special session of the year.
But under the proposal as it currently stands, the popular Taylor Opportunity Program for Students scholarships are fully-funded, as are college and university campuses, Go Grants, food stamps, district attorneys and aid to private and parochial schools.
In tandem with the sales tax bill, the House also approved House Bill 1 in a 95-1 vote to direct which priorities will be funded with the new revenue.
HB1 must also be vetted by the Senate.
"This plan is not perfect, but that's the nature of a compromise," Edwards said. "We're able to do this where we can fund our most critical priorities."
In a statement, the House Republican Delegation called HB10, which was co-sponsored by Barras, as "a Republican-led compromise plan."
"Because of our conservative leadership, we were able to fully fund our critical services for significantly less than what the Governor wanted," the caucus said in its statement.
House GOP Caucus Chair Lance Harris, R-Alexandria, voted against the bill.
After Friday's vote, the House burst into applause — signaling the end to what had become a seemingly never-ending cycle of special sessions and doomsday budget predictions.
"It's been a long day and a long week," Davis said. "This has been a total team effort and it's been a process."
Edwards, a Democrat, has frequently portrayed House Republicans as blocking tax measures for political purposes and chided the chamber for not passing revenue-raising bills in the previous two special sessions or last year's regular session that dealt strictly with fiscal issues.
"At the end of the day, I think we are in a relatively good place," Edwards said Friday.
The expiring temporary taxes were adopted in 2016 to serve as a "bridge" to a more structural overhaul of the state budget.
But the House, where tax bills must begin the legislative process, has rejected previous proposals. The sales tax proposal ultimately emerged this year as the centerpiece of any effort to address the latest fiscal cliff.
Members of the Legislative Black Caucus had resisted any figure less than the half-cent that Edwards said would prevent further budget cuts, while House Republican leaders said they wouldn't support the half-cent and wanted something lower.
Barras, before the chamber adjourned late Thursday evening, said that both sides had not budged in three days and urged them to come together, prompting discussions of the possible 4.45 percent compromise.
The decision to have an uneven sales tax isn't unusual, said Scott Drenkard, an economist at the Washington, D.C.-based Tax Foundation.
"States always round," he said.
Some states take the fractions even further. Minnesota's state sales tax rate is 6.875 percent, for example.
Drenkard said it should not be a burden on businesses or the state to handle the fraction.