Saying something must be done to find the money to fix the state’s crumbling highways and dangerous bridges, the Louisiana House’s tax writing committee late Tuesday night rejected the latest effort to increase the tax on gasoline – even after it was eviscerated – but advanced a bill that would extend the temporary sales tax increase.
On an 8-8 vote, the House Ways & Means committee sidelined House Bill 615, which started out proposing lowering one dedicated tax and raising another with the effect of increasing the tax on gasoline at the pump, generating about $315 million in additional revenues per year to address a $14 billion backlog on road needs.
Then without opposition, the tax-writing panel approved House Bill 693, extending the temporary .45% sales tax from 2025 to June 30, 2031 and dedicating a portion of that money to funding infrastructure projects.
Though unopposed by legislators, HB693 caused an unusual pairing of the right-wing Americans for Prosperity and left-wing Louisiana Budget Project in shared opposition to the measure.
Two reports Thursday panned how Louisiana supports its roads and bridges and how a substandard transportation system is costing motorists $7.6…
James Lee, head of the local AFP branch, pointed out that the .45% state sales tax was sold as a stop-gap to keep the state from spiraling into bankruptcy while lawmakers sorted out and stabilized Louisiana’s chaotic taxing system. And HB693, for all its language about creating a source of income for infrastructure projects, amounts to little more than six-year extension of what was supposed to be a two-temporary tax.
“This was a tax passed as a Band-Aid in 2016 in hopes tax reform would soon follow,” Lee said. When that didn’t happen, “it was extended in 2018.”
Americans for Prosperity is an influential libertarian conservative political advocacy group, founded by the billionaire Koch brothers and based in the Virginia suburbs of Washington, D.C.
Davante Lewis of the Louisiana Budget Project agreed. Affiliated with the Center on Budget and Policy Priorities, a Washington, D.C.-based progressive organization, the Louisiana Budget Project monitors and reports on public policy as it affects the state’s low-to-moderate income families.
Lewis pointed out the sales and use tax amounted to about 1.6% of the income for those making more than $473,000 annually, about 1% of the population, versus 9.6% of the income for families making less than $17,100 per year, which represent about 20% of the workforce.
“While we believe in infrastructure and we know that infrastructure is important for the upward mobility of low-and-moderate income families, we cannot support a solution that funds these projects on the backs of the same individuals who are struggling to make ends meet,” Lewis said, adding that the other options available have failed in Ways & Means for years.
“How are we going fund infrastructure?” asked Rep. Jeremy LaCombe, D-Livonia.
Lee answered, “I’m okay with using the general fund for infrastructure and funding the projects through general appropriations.”
“So, basically, nothing realistic for today,” LeCombe replied.
“We have a $14 billion backlog and that does not include what we need to do to improve and remain competitive,” said Baton Rouge Republican Rep. Paula Davis, who brokered the .45% sales and use tax deal between Democrats and Republican intransigence on fixing what then was a billion-dollar hole in the state budget.
“We’re just asking for the opportunity to go to the full House and continue the discussion,” Davis said.
Ways & Means members agreed to advance the legislation.
But they were less accommodating for HB615, the latest effort to raise the gasoline tax, which again was backed by a tranche of business groups. The tie vote spelled another failure – it has become almost an annual event – to raise more money for infrastructure by updating a tax that has remained the same for decades.
The legislation went down even after state Rep. Barbara Freiberg, R-Baton Rouge, stripped out the language dealing with gasoline taxes and left only the portions that would tax electric vehicles at $400 per electric vehicle and $275 per hybrid vehicle beginning on July 1, 2025.
Freiberg had picked up legislation cast aside earlier in the session when opposition to the gasoline tax mounted among Republican lawmakers and Democratic Gov. John Bel Edward’s top highways advisor, Shawn Wilson, who were less than excited by yet another bid to increase the gasoline taxes.
Initially, the proposal would have lowered the gasoline tax dedicated for infrastructure and increased the tax by 2 cents every two years for use only by the Construction Subfund of the Transportation Trust Fund, raising about $314 million per year. The new language would raise about $1 million but increase over time, as drivers switch to electric vehicles.
Rep. Buddy Mincey Jr., R-Denham Springs, agreed that electric vehicles should pay, but said his constituents didn’t want increased taxes.
Voting for taxing electric and hybrid vehicles (8): Reps Marcus Anthony Bryant, D-New Iberia; Rhonda Gaye Butler, R-Ville Platte; Les Farnum, R-Sulphur; Jason Hughes, D-New Orleans; Jeremy LaCombe, D-Livonia; Joseph A. Orgeron, R-Larose; Tammy T. Phelps, D-Shreveport; and Malinda White, D-Bogalusa.
Voting against HB615 (8): Ways & Means Chair Stuart J. Bishop, R-Lafayette; Reps. Ryan Bourriaque, R-Abbeville; Phillip DeVillier, R-Eunice; Wayne McMahen, R-Minden; Buddy Mincey Jr., R-Denham Springs; Neil Riser, R-Columbia; Matthew Willard, D-New Orleans; and Mark Wright, R-Covington.