Louisiana House members find themselves in a familiar position with just days to go in the third special session of the year.
After a day of behind-the-scenes negotiations, speculation over a possible surprise influx of money and loudly voiced frustrations from both sides of the aisle, the House voted 60-40 to reject the first tax measure that has made it to the floor. House Bill 10, which was amended before the vote, would have extended half of a 1 percent sales tax set to expire June 30.
"I think we've pretty much wasted an entire day and we are running out of time," said Rep. C. Denise Marcelle, D-Baton Rouge.
Thursday was seen as critical to the latest special session, which must end by 6 p.m. Wednesday. Special sessions cost taxpayers about $60,000 a day.
Instead, the House members left late in the evening, in what House Speaker Taylor Barras described as "extreme deadlock" over whether to renew half or two-fifths of the expiring sales tax.
Under one scenario, the state sales tax rate would go from 5 percent to 4.5 percent on July 1; under the other, the tax rate would go from 5 percent to 4.4 percent.
"What we need is movement from the two corners," said Barras, R-New Iberia. "No one has budged in the past three days."
The House is set to return at 9:30 a.m. Friday so that negotiations can continue.
Thursday's vote was largely seen as a measure of where votes stand in the conservative Republican-controlled House for a renewal of a half-cent sales tax. Republican House leaders have been pushing to renew a smaller portion, but members of the Legislative Black Caucus have maintained that they will not vote for any proposal less than the half-cent that Gov. John Bel Edwards says is needed to prevent cuts to state services.
The debate over how much of the temporary tax to renew has doomed two previous special sessions, with the House unable to cobble together a bipartisan two-thirds majority, 70 votes, needed to pass tax legislation.
Legislative leaders said they had hoped the House would advance a sales tax bill to the Senate by Thursday evening to keep the process moving and give the upper chamber adequate time to vet proposals before final negotiations.
“We’re a bit disappointed that nothing’s coming over to us,” said Senate President John Alario, R-Westwego.
But Alario said the House is walking a delicate line.
“They’ve got to figure out the balancing act,” Alario said. “If you do one thing, you offend one group; if you do another, you offend someone else.”
Alario said he was frustrated, though, that debate has come down to a fraction of a penny.
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“There are people who say, if we’re not going to fund TOPS at 100 percent, then why vote for a tax at all,” Alario said.
For taxpayers, the one-tenth of 1 percent at issue would be 10 cents on a $100 purchase. For the state budget, the difference is about $85 million in cuts that would have to be made.
Thursday's vote came hours after the House got off to a late — and dramatic — start, as speculation swirled over a potential boost to the state’s coffers thanks to news of a U.S. Supreme Court decision that paves the way for states to require internet retailers to collect sales taxes.
Members huddled in small groups, poring over the ruling and questioning what it might mean for the state’s bottom line and whether it would be soon enough to whittle away at the $506 million gap in the budget that begins July 1.
Citing the inability to get 70 votes amid uncertainty over the high court ruling, Rep. Stuart Bishop, R-Lafayette, withdrew his own sales tax measure that would have renewed a half-cent in the coming year but would gradually shrink to one-fifth of a penny in seven years.
“Today, that changed some minds,” Bishop said.
The Louisiana Department of Revenue, independent tax policy analysts and business advocates later extinguished most hopes of an unexpected windfall that would fix the fiscal cliff dilemma.
The Revenue Department said in a statement that Louisiana is “some time away from a final decision and seeing the full impact” of the ruling.
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By the evening, most Republicans and Democrats in the House echoed that it’s too early to count on.
“I think it’s an unknown,” said Rep. Tony Bacala, R-Prairieville. “There needs to be some in-depth discussion with people who understand the law and people who understand taxation.”
As the budget stands, the popular Taylor Opportunity Program for Students scholarships would face a 30 percent cut, colleges and universities would face a nearly 20 percent hit, inmate housing programs would be threatened and food stamps could end, as part of the $506 million in unfunded priorities in the $29 billion budget that lawmakers passed last session.
Since February, Republican leaders have consistently pushed for a smaller sales tax renewal. In the first special session, they proposed one-fourth. In the second special session, they proposed extending one-third.
This time around, Rep. Paula Davis, a Baton Rouge Republican, has brought a proposal backed by leadership to renew two-fifths of the penny.
“I know everybody’s been frustrated,” Davis said. “I brought this bill to be a compromise between the (third) and (half).”
Another bill in play, sponsored by House Ways and Means Committee Chairman Neil Abramson, D-New Orleans, would extend one-third of the expiring 1-cent sales tax. It has been slated to be brought to the floor on Friday. Multiple measures also have been placed in a posture to bring them to the House floor if a majority of members agrees to pull them from the committee.