Louisiana budget-balancing session goes down to final hours

[tweet_dis2]Louisiana budget-balancing session goes down to final hours[/tweet_dis2]

BATON ROUGE, La. (AP) — Louisiana lawmakers entered the final hours of a special session Monday still trying to broker a final deal on taxes and spending that could avoid both deep cuts and a government shutdown for the new financial year only weeks away.

Senators passed a $29 billion budget proposal that relies on $540 million in additional taxes for the financial year that begins July 1. House lawmakers backed a lower spending plan that assumed $400 million in taxes.

Lawmakers were uncertain whether they would settle the disagreement by Monday at midnight, when the special session must end. An earlier special session on taxes in February ended in partisan stalemate.

Meeting with supporters Monday morning, Gov. John Bel Edwards talked about reaching an agreement: “We’ve got a good shot at it.”

The Democratic governor, who called the session, had wanted lawmakers to replace $648 million in temporary taxes expiring July 1. But acknowledging he won’t win support for the full amount in the Republican-led Legislature, Edwards backed the Senate proposal.

“Obviously it’s not everything that I asked for,” he said. “But it is a really decent resolution to the budget problems we have.”

Still, some factions dug in their heels in opposing different parts of the proposals under negotiation.

Rep. Tanner Magee, a Houma Republican, opened the House with the “Hail Mary” prayer, telling his colleagues he chose that selection because “we might need a miracle.”

Nearly $1.4 billion in temporary taxes, mainly sales taxes, passed by lawmakers in 2015 and 2016 are expiring when the new financial year begins. Increases in other tax types lessen the gap, leaving Louisiana estimated to bring in $648 million less in general state tax dollars next year.

The centerpiece of tax negotiations involves the expiration of a 1 percent sales tax hike enacted two years ago that would drop the state sales tax rate to 4 percent in July. The House voted to renew one-third of the expiring tax, to have a sales tax rate of 4.33 percent on July 1. The Senate backed a 4.5 percent rate.

The difference is 17 cents in sales taxes on every $100 of spending.

The two chambers also disagree on the level of sales tax exemptions to continue. And Democrats, particularly members of the Legislative Black Caucus, want a tax break program for the working poor expanded to offset some of the sales tax’s impact.

Both the House and Senate have agreed to scale back an individual income tax break that Louisiana allows for taxes paid to other states, but a final bill version must be worked out before it can reach the governor.

In the Senate version of the budget, college campuses and the TOPS tuition program would be protected from reductions, along with major health programs and the child-welfare agency. Corrections officers would get a pay raise. Need-based aid for college students would grow. The foster care program would be expanded to pay for students to finish high school or until they reach age 21, rather than ending payments when a child turns 18. Some places would take small cuts.

If enough taxes aren’t passed by lawmakers, certain portions of the bill would take pro-rata, across-the-board cuts. Those reductions would hit TOPS, college campuses and an array of departments, but health services would be shielded.

The House version of the budget would force larger cuts, shrinking TOPS awards by 10 percent and health spending. Health officials said they would have to heavily reduce or eliminate substance abuse and mental health services.

House Appropriations Chairman Cameron Henry said if all the tax bills fail, he wants lawmakers to enact a spending plan containing cuts.

“We still need a budget,” the Republican told House lawmakers. But he added: “That’s the worst-case scenario.”


Follow Melinda Deslatte on Twitter at http://twitter.com/melindadeslatte

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This article was originally posted on Education Week: American Education's News Site of Record

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