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Louisiana Legislature is one step closer to a budget - 6/23/2018

A last-ditch effort to shore up the state's finances has crossed another hurdle, setting the stage for the Senate to take up a sales tax measure and budget bill on the floor Sunday afternoon.

If all goes according to legislative leaders' plans, the Senate is likely to give final approval to a bill that would set the state sales tax rate at 4.45 percent on July 1 by extending nine-twentieths, or .45, of a 1 percent tax hike that would otherwise expire.

The tax hike would run through 2025 to finally put an end to what had become a constant cycle of special sessions and rejected proposals to address the fiscal cliff the state faces when more than $1 billion in temporary tax measures expire at the end of the month.


A related appropriations bill's path to final passage may not be as certain if a Senate committee amendment that has drawn the ire of House Republicans remains attached to it.

The current special session, which must end by 6 p.m. Wednesday, is the third this year and the seventh since Gov. John Bel Edwards took office. Special sessions cost taxpayers about $60,000 a day.

With little discussion and without objection during a Saturday morning hearing, the Senate Revenue & Fiscal Affairs Committee advanced House Bill 10 to the chamber floor. Senate leaders have said they plan to pass the House version of the bill, which means the tax renewal could be final with the Senate's vote Sunday night if no changes are made.

"Hopefully that's the end of it, that day," Senate President John Alario, R-Westwego, told members before they finished up work on Saturday.

Though the tax deal has been deemed a "compromise" all around, legislators and other stakeholders have carried an almost celebratory tone since the House busted through a long-standing impasse and passed HB10 in a bipartisan 74-24 vote on Friday.

"We're not over the goal line today but we are so much closer," Edwards, a Democrat, said after the House vote.

Not all are happy with the proposal. Anti-tax advocates and some conservatives have decried the decision to extend a portion of what would have been an expiring tax.

"If only legislators worked as hard on fulfilling their promise of enacting tax reform as they have been on trying to raise taxes these special sessions, taxpayers would be rejoicing instead of feeling burnt by the legislators sworn to represent their interests," Americans for Prosperity-Louisiana state director John Kay said after the House vote Friday

On the other side, some had hoped that the Legislature would keep half of the expiring tax.

"I wish we would have raised enough money so we could have taken care of all the needs," said Sen. Regina Barrow, D-Baton Rouge.

Without the $480 million in revenue that HB10 is expected to generate, state funding for higher education, public safety and other programs would have faced deep cuts under the budget that lawmakers adopted earlier this month.

The Senate Finance Committee, which also met Saturday morning, advanced House Bill 1 to outline where the new revenue will be spent.

Deal brokered: Louisiana House advances sales tax bill; here are next steps

The proposal would fully fund the Taylor Opportunity Program for Students scholarships, colleges and universities, social services, district attorneys and support for private and parochial schools, among other priorities. An earlier budget proposal spared health care from cuts in the $29 billion budget that takes effect July 1.

"It's enough to meet everybody's needs and the missions of those departments, we hope," said Senate Finance Chair Eric LaFleur, D-Ville Platte.

But the House Republican Delegation quickly excoriated a change that the Senate panel made to the bill, signaling that its fate may not be as clear cut as the tax bill on Sunday and hopes for an early end to the session may be overly optimistic.

The Senate panel altered the House proposal to allow the $43 million in remaining unfunded priorities be covered if the state sees higher-than-anticipated tax collections. That change would mean HB1 must return to the House before it can be finalized.

The House GOP Caucus released a statement accusing Edwards and his allies of attempting to "circumvent the legislative process and allow the governor to spend additional money on pet projects if the state's revenue is greater than expected."

House Republicans want any additional revenue to go through the Joint Legislative Budget Committee, rather than being automatically plugged in to fund the list of unfunded priorities.

House Appropriations Chair Cameron Henry, a Metairie Republican who is the bill's sponsor, said he plans to reject the bill if it comes back with the Senate amendment.

LaFleur said he wanted to ensure that other priorities, including the state inmate housing program and juvenile justice facilities, could be funded if money becomes available.

Inmate housing through local sheriffs faces a $10.5 million hit, though the rates paid to sheriffs can't be cut.

Corrections Secretary Jimmy LeBlanc said that he accepted that the department may have to return next year to ask for more money to fill the gap, which he often does. "I don't think there's been a year when I've been in this department that we haven't had a supplemental," he said.

The Office of Juvenile Justice is slated to take a $14.8 million hit as the state raises the age of adult prosecution from 17 to 18 years old next year.

Without that money, the state still won't be able to open a long-delayed juvenile detention center in Bunkie, and officials said it could put some strain on existing facilities. 

"If we don't have that facility open, we're going to have a capacity issue where we may be having to send those kids home," said James Bueche, the head of OJJ.

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