For two years now, conservative Republicans and Democrats led by Gov. John Bel Edwards have been clashing at the State Capitol over how to finance a long-term solution to the state’s budget woes.
The next face-off in the ongoing saga takes place Sunday, during the fifth special session of Edwards’ term, when the two sides attempt to move forward on a compromise agreement aimed at filling a nearly $1 billion hole in the budget.
The key votes on taxes are scheduled to take place Sunday afternoon in the House Ways and Means Committee, while the Health and Welfare Committee will weigh measures that would raise spending in the short-term but Republicans believe it will cut spending long-term. Any bills advanced by either committee would go to the House floor, the next step in the legislative process.
The conservative Republicans in the House want cuts in the budget and will likely vote against more taxes, while Edwards and his allies continue to insist that the government needs more money to meet citizens’ needs.
While ego and partisan politics play a role, at the heart of the debate is a philosophical divide over the benefits of government.
In general, conservative Republicans view much government spending as wasteful, driven by the needs of a faceless bureaucracy with an insatiable appetite.
U.S. Sen. John Kennedy has encapsulated this view with this pithy phrase: “It’s not their money. It’s our money.”
In general, Democrats view government spending as a way to invest in the future and to lessen the advantages of haves over the have-nots.
Not filling the budget gap, Edwards told lawmakers on Monday when he opened the special session, “would mean reduced opportunities for Louisiana's kids to go to college. It would mean reduced opportunities for health care for the neediest and most vulnerable among us. And it would mean reducing law enforcement's ability to do its job.”
Closing the nearly $1 billion gap, most lawmakers agree, will require some combination of measures that raise tax revenue and cut spending.
A key sales tax measure stalled Wednesday before the Ways and Means Committee in the face of opposition by both Democrats and Republicans, but for different reasons. Since then, Speaker Taylor Barras, R-New Iberia, has been negotiating with House Democratic leaders and the governor’s office to overcome the objections and settle on a tax plan that can clear Ways and Means and win a two-thirds majority — 70 votes in the 105-member House.
Any measures approved in the House would then advance to the Senate for consideration.
The 144 members of Louisiana’s Legislature will convene Monday in a special session that will mark their fifth attempt in two years to solve t…
There are 41 Democrats and three independents in the House, so any tax measure will likely require support from virtually all of them and about half of the 61 House Republicans.
Helping to fill the $1 billion shortfall, some budget planners expect to collect about $300 million in extra revenue because of the tax cut approved by President Donald Trump and Congress, according to the latest estimate.
That windfall comes courtesy of an unusual feature in state tax law that allows individuals to deduct their federal tax payments on their state taxes. With taxpayers set to pay less in federal taxes, they will be able to deduct less in their state tax payments, meaning they’ll pay more in state taxes. The $300 million would reduce the size of the budget gap to $700 million.
To make up the difference, the House has to decide whether to renew a quarter or half of a 1-cent sales tax increase that lawmakers authorized in 2016 to last until June 30, 2018. Renewing a quarter of the 1-cent increase could raise about $220 million per year, some calculate, taking care of nearly one-third of the $700 million remaining shortfall.
The politics of the partial sales tax renewal are complicated.
Democrats, led by the Legislative Black Caucus, blocked passage of a ¼-cent renewal on Wednesday by Ways and Means to signal their opposition to over-relying on sales taxes to generate revenue. They say such taxes are regressive and hit the poor hardest.
Democrats also want to permanently end a series of breaks for businesses on sales taxes that the Legislature temporarily approved, and they want to trim a tax break for individuals who itemize on their federal taxes — a break that generally benefits wealthier taxpayers.
Many conservative Republicans, meanwhile, will vote no on any taxes, forcing Barras to find 30 or so Republicans who can support a partial sales-tax renewal.
With an increasingly narrow window for approving revenue-raising measures ahead of a looming budget gap, the Louisiana Legislature's efforts h…
Edwards has repeatedly told lawmakers that they need to approve more money or the state will have to make devastating cuts to popular programs such as the TOPS scholarships and medical services for the disabled.
State Rep. Ray Garofalo is one of the Republicans who remains unswayed by the governor’s arguments. A third-term legislator from Chalmette, Garofalo believes that the Edwards administration has not cut enough fat out of government — a view shared by folks in his district, he said.
“The majority of people do not trust government to be wise spenders of taxpayer dollars,” Garofalo said. “Why is government growing so much? When I talk with constituents, that’s the first question for me.”
The Edwards administration wants to spend about as much money next year as this year in the state's "general fund” — meaning all money collected from taxpayers in Louisiana.
Overall spending by state government would rise under the governor’s plan, but the increase would come from pass-through federal money resulting from Edwards’ expansion of the Medicaid program for the working poor.
State Rep. Jay Morris, R-Monroe, has voiced support only for making out-of-state corporations pay more taxes.
“Government needs to be as efficient and as lean as possible,” Morris said. “Additional revenue is a last resort. There are other ways to balance the budget other than imposing taxes on citizens who live and work in this state.”
State Rep. Phillip DeVillier, R-Eunice, will likely vote no on any tax measures.
“My constituents are asking me, from questionnaires I send out, to reduce waste and government spending,” he said, adding that he believes state government sends too much money to local governments. DeVillier also wants the state to shift its spending on construction away from local projects — such as renovating courthouses and parks — to those deemed to benefit the entire state.
“We need to be more efficient to fully fund TOPS and take care of higher education and health care,” DeVillier said.
State Rep. Robert Johnson, D-Marksville, said anti-tax Republicans essentially want to have their cake and eat it, too.
“You can’t say we want to have a generous TOPS program, better roads, better schools and more money for the public/private hospitals and at the same time say we want to cut taxes" by not renewing at least a portion of the 1-cent sales tax, Johnson said. “It’s intellectually dishonest.”
Johnson noted that Louisiana has a nearly $14 billion backlog in road projects and ranks near the bottom in national rankings of public school test scores and various health measures. Meanwhile, the state has the fifth-lowest state and local combined tax burden nationally, according to the Tax Foundation, a Washington-based nonprofit.
“To say you don’t trust government,” said state Rep. Pat Smith, D-Baton Rouge, “who will be the person to ensure that there’s equity in schools, housing, jobs and pay? Those are the things that help people get to a better life.”
State Rep. Sam Jones, D-Franklin, is particularly focused on the need to provide more money to dredge rivers that serve the state’s ports.
“Every port in Louisiana is drowning in mud, and it diminishes the capability of moving out and moving in products,” Jones said. “Our ports are critical for our economic development.”
Jones also believes that lawmakers are short-sighted for not approving higher taxes to fund bridge and roadwork projects around the state. A proposal last year to raise the state gas tax by 17 cents per gallon died after failing, in the face of Republican opposition, to reach the two-thirds majority needed in the House.
“It’s ironic that we sent people to the moon, but we can’t get people across the bridge in Baton Rouge because we’re not spending money on infrastructure,” Jones said.