With just days to spare, the Louisiana Legislature has voted to extend a sales tax hike through 2025 to narrowly avoid a revenue shortfall that threatened deep cuts to state services when the new budget takes effect July 1.
"Now that the fiscal cliff is in the rear-view mirror, prosperity and stability are straight ahead," Gov. John Bel Edwards said Sunday night after lawmakers wrapped up the third special session of the year, putting into place a plan to shore up the state's finances before more than $1 billion in temporary tax measures expire at the end of the month.
The state sales tax rate will go from 5 percent to 4.45 percent on July 1, under plan that Legislature finalized Sunday night. The state sales tax rate otherwise would have dropped to 4 percent when a temporary 1-cent sales tax expires at the end of the month.
By Melinda Deslatte, Associated Press
The nearly $500 million generated by keeping a portion of the sales tax hike will pay for Taylor Opportunity Program for Students scholarships, college and university funding, social services, public safety and other state programs that had not been funded in the state's $29 billion budget for the coming year.
"Nobody got everything that they were looking for, but everybody got something — that's what a compromise is," said Edwards, a Democrat. "But it is going to fund our most critical priorities in a responsible way."
Two special sessions imploded earlier this year after the conservative GOP-controlled House repeatedly rejected sales tax measures, largely due to a disagreement over how much of the expiring 1-cent sales tax to renew.
The Legislature's inability to plug the looming budget hole set off multiple waves of fears of what deep cuts would mean to the state: An end to food stamps in Louisiana, nursing home evictions, minuscule TOPS grants, closed parks and shuttered hospitals.
All of those programs were spared in the final spending plan that passed Sunday.
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The most recent session, described by many as a last-ditch attempt at addressing the fiscal cliff, had also appeared to be heading toward collapse until Edwards and House Speaker Taylor Barras, R-New Iberia, hashed out a compromise proposal that got the 70 votes it needed to pass the House on Friday.
Barras, R-New Iberia, said he was "appreciative, and somewhat relieved" after the legislation was finalized Sunday.
"It's an incredible amount of work to get through what we've been through in 10 sessions," he said.
The deal means that lawmakers likely won't return to the Capitol for another session this year, after seemingly never-ending sessions since Edwards took office in 2016.
Special sessions cost taxpayers about $60,000 a day.
"We always knew we would succeed. The state needed this," said Rep. Sam Jones, D-Franklin.
Just days earlier, the House had reached what Barras called an "extreme deadlock" over whether to renew half or two-fifths of the expiring sales tax and appeared to be teetering on the edge of another before the down-the-middle proposal was worked out Friday.
The temporary sales tax hike that was set to expire June 30 was adopted in 2016 as a temporary "bridge" to a more permanent stabilization of state spending. Multiple sessions and two-and-a-half years later, the Legislature had not reached an agreement on the best path forward, until the agreement to temporarily extend a portion of that tax increase.
It didn't take long for news to spread Sunday that the Louisiana Legislature passed a budget that fully funds the state's mega popular TOPS sc…
"Nobody likes this bill; nobody has a better solution," said Sen. Jack Donahue, R-Mandeville. "We cannot make these cuts and carry on this state."
Sen. Sharon Hewitt, a Slidell Republican who voted against the tax measure on the Senate floor Sunday, said she believes leaders should have done more to rein in spending, as the budget for the coming year will be the largest in the state's history.
"The growth of our spending is becoming unsustainable," she said. "The fact is, I think the administration has done very little to contribute to structural budget reform."
Edwards said that Hewitt, a potential Republican challenger in the upcoming governor's race, had neglected to recognize mandatory cost increases the state faces in the coming year.
"We're actually cutting all across state government to accommodate those increases," he said.
Louisiana Gov. John Bel Edwards was in quite a jovial mood Sunday night during a news conference in which he touted the Legislature passing a …
Sen. J.P. Morrell, D-New Orleans, said he and other members of the Legislative Black Caucus were not thrilled about relying on sales taxes, which tend to be more regressive, but they agreed to the proposal to prevent deep cuts to state services.
"We had several opportunities where this body tried to do tax reform," he said. "I won't be here when the bell rings on this tax, but it just boggles my mind when some people come down here and talk about taxes like it's the first thing we ran to."