Senate passes budget, tax deal with one day left in Special Session

Senate passes budget, tax deal with one day left in Special Session
The Senate passed their version of the budget Sunday night with one day left in Special Session

BATON ROUGE, LA (WAFB) - The Senate passed its version of the state operating budget Sunday night. It would fully fund TOPS, higher education, and the Department of Health.

"I think it's part of a good, solid policy," Senate Finance Chairman Eric LaFleur, D-Ville Platte, said. "At the end of the day, we chose to raise the minimal amount of money that it would take to fund the important things in state government."

The Senate version of the budget assumes House Republicans will agree to the Senate's changes to the key tax bill that funds about 80 percent of the $648 million dollar budget shortfall.

The rest of the money would come from the BP oil spill settlement. The state would still have to make cuts.

Right now, that key tax bill would extend 4.5 percent of the state sales tax which is set to expire at the end of June. It would create a new expiration date of 2025.

Business and industry would pay at a lower rate, which is a significant change from the Senate tax committee's version of the bill.

The Senate also included an increase in the Earned Income Tax Credit in the deal - a nod to House Democrats who say they don't want to vote for a tax extension they say disproportionately affects the poor.

"As we contemplate trying to build a compromise to get to a half a penny, what I'm trying to do is to give relief to the working poor," Sen. JP Morrell said.

Both bills now head back to the House where they will almost certainly face a significant challenge. Earlier in the week, House Republican Caucus Chair Rep. Lance Harris, R-Alexandria, said an amended version of the tax would not pass.

Lawmakers have until midnight on Monday to compromise on a final solution. If the legislature cannot beat the clock, they'll be forced to make deep cuts to state services or come back for a third special session to try and raise revenue again.

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