Lawmakers draw lines in sand as state budget deadline looms

Lawmakers draw lines in sand as state budget deadline looms

BATON ROUGE, LA (WAFB) - With the deadline to fix the budget less than 24 hours away, state lawmakers still have several issues to iron out before producing a plan that combines cuts and tax increases.

On Tuesday, leaders of the House and Senate spent much of the day behind closed doors while working to find compromise.

One issue at the center of the debate is the sales tax. The House has already passed two bills on the issue. One bill that adds one more penny to the state's four percent sales tax, while the other bill removes exemptions from one penny of the state's four cent sales tax. By doing so, businesses would be forced to pay more for utilities and machinery purchases.

"The point is do it across the board so nobody gets hurt terribly," said HB 61's author, Rep. Jay Morris, R-Morehouse and Ouachita.

Speaking before the Senate Revenue and Fiscal Affairs Committee Tuesday, business and industry leaders called on lawmakers to not clean the penny and instead raise the sales tax further. This would keep the tax exemptions in place.

"This is arguably the most difficult and challenging time in the history of the oil and gas industry with record low commodity prices, with lawsuits, and now with taxes," said Chris John, president of the Louisiana Mid-Continent Oil and Gas Association.

The idea of increasing the sales tax beyond one penny has been floated before behind the scenes by lawmakers. Often the model involves d ropping the tax rate back over time.

"Starting July 1, you bump it back down to one, then to .75 then to .25. I think you can do it in a way where you can address the crisis, but over the course of that tax, you can save taxpayers money," said Steve Waguespack, president of the Louisiana Association of Business and Industry.

Waguespack's testimony drew particular ire from Sen. Karen Peterson, D-New Orleans. Waguespack had previously served as chief of staff in the Jindal administration.

"You have no credibility. The things you said ended us up in mid-year cuts every year," said Peterson.

Ultimately, several senators - especially those from New Orleans - objected to this testimony from the business leaders, saying the increased sales tax would more negatively impact the poor and middle class.

"Let's put it on the backs of poor people, let's take the path that you think and historically has been the path of least resistance. Well it isn't any more. Poor people will no longer be the path of least resistance," said Sen. Troy Carter, D-New Orleans.

Ultimately, the committee amended the bill, cleaning all four pennies.

"When people are being told that businesses are sharing their burden, they have quite a few tools at their disposal to lower that burden, whereas that single mom, that family do not," said Sen. JP Morrell, D-New Orleans.

Morris is fearful that the bill, which faced difficulty in the House, now may face greater scrutiny with all four pennies cleaned.

In addition to the divides over the sales tax, Governor John Bel Edwards has called on lawmakers to modify the state income-tax brackets.

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