tax breaks bill

Louisiana Economic Development Secretary Don Pierson speaks Thursday, May 31, 2018, in favor making permanent small reductions in three programs he oversees. State Sen. Jay Luneau, D-Alexandria, presented the legislation to the House Ways & Means committee, which rejected it. 

Baton Rouge Democratic Rep. Ted James was cut off Thursday when he tried to make the point that the Republican House majority had sent a total of one bill to the Senate that addressed the fiscal cliff facing the state’s budget at the end of this month.

Oil City Republican Rep. Jim Morris, sitting in as chair in House Ways & Means committee, wanted to stick to the subject of the bill at hand in a hearing that had long gone off the rails as Republican members took pot shots at the very senators who the night before had beat up on House Majority Leader Lance Harris, of Alexandria, over that tax measure.

“It’s very clear we have conversations that go all around the world and when certain members make those same questions the red light goes up, let’s stick to the story," James said, referring to the committee chairman's red button that cuts off the microphone. "What I’m saying is that I’m growing very weary and tired of it."

The subject at hand was a measure that gave a 1.5 percent increase in a tax credit covering 42 percent of the state’s individual taxpayers — workers with families making no more than $48,000 a year — at a cost of $21 million to the state.

Sen. JP Morrell, D-New Orleans, pitched the modest increase to mitigate the sales tax increases being contemplated to cover a $648 million shortfall in the revenues necessary to cover promised state services for the fiscal year that begins July 1. Sales taxes are about the only way to raise immediate money for government. Households on the lower-end of the wage scale already spend about 10 percent of their money on taxes — about double what better-off folk pay.

Morrell’s proposal was shot down on a party-line vote in the Republican-dominated committee, though not a single person testified against it.

Moments before, the same panel rejected another bill that would make permanent a temporary 2015 reduction in tax rebates given businesses as an incentive to locate or expand in Louisiana. Louisiana Economic Development Secretary Don Pierson, whose agency is charged with attracting business, advocated for the permanent reduction that would have raised $23 million in the following fiscal year.

Sen. Jay Luneau, D-Alexandria, said after the vote that he knew the bill would fail in the House committee. His main complaint, however, was that while in the Senate not a single business lobbyist had been willing to negotiate or speak against the legislation. As much lip service as leaders give to “the legislative process,” there’s very little conversation between the two chambers, he said.

“We hear about process all the time. But, the process is you forward an idea, hear from everyone involved and then, together, come up with a solution,” he said. “We’re not getting that.”

Luneau is a member of the Senate Revenue and Fiscal Affairs committee, which Morrell chairs. On Wednesday night, Rev & Fisc heard the legislation to which James referred. Sponsored by Harris, the bill would retain a third of the penny of the sales tax set to expire at the end of the month. It would raise $365 million. Democratic Gov. John Bel Edwards could cut $283 million, if that’s what ultimately remains, from state spending to balance the budget by July 1.

Let’s go home.

“This is the compromise,” Harris said, adding that his bill is the only measure that has a chance of passage before the special session adjourns Monday night.

Rev & Fisc then added to Harris’ measure an array of caps and sunsets to tax exemptions, such as requiring businesses to pay more sales taxes on utilities purchased, that went towards raising $279 million more, putting the total at $644 million. Morrell said the amendments should provide a starting point for negotiations.

Harris said he wouldn’t support the legislation and doubted the House would either.

While arguing for senators to approve his measure unamended, Harris said his third-of-a-penny sales tax hike would take care of the looming budget crisis and enable to lawmakers to start the philosophical discussion that divides the Louisiana Legislature and state government: how big government should be; what services state government should provide; and how should those expenses should be paid.

Lest we forget, however, the hole legislators are trying to fill comes from the temporary sales tax applied two years ago, now set to expire, that was supposed to give lawmakers time to work through those policy differences and cobble out a more solid financial system.

All this talk about conversation to bridge philosophical divides could be taken more seriously if legislators actually talk to one another.

Follow Mark Ballard on Twitter, @MarkBallardCnb.