BATON ROUGE, La. (AP) - Is renewal of an expiring sales tax a tax hike or a tax cut? Are catastrophic budget cuts only two weeks away or are hundreds of millions in reductions simply modest adjustments in a multibillion-dollar budget? Is a small group of House Republicans standing up for taxpayers, or is a minority of obstinate lawmakers standing in the way of compromise?
Heading Monday into the fourth legislative session this year, Democratic Gov. John Bel Edwards and House GOP leaders have vastly different narratives about the scope of Louisiana’s budget gap and the taxes proposed to stop steep cuts that hit July 1.
The problem for House Republican leaders trying to shape the perspective is not all the members of their own, fractured delegation back up their point of view - as evidenced by the collapse of a sales tax deal in the final hours of a special session that ended earlier this month.
In the Senate, Republicans and Democrats were largely in lock-step about a proposal to patch together next year’s budget with a $500 million sales tax bill that was less than the governor wanted but that he supported.
The House was not as unified.
Democrats largely backed the Senate plan. But the GOP delegation in the chamber, which makes up 61 of 103 lawmakers, was split in three factions. One portion backed Republican House Speaker Taylor Barras and House GOP leader Lance Harris in supporting a smaller sales tax than Edwards wants. Another portion supported the Senate proposal backed by Edwards. A final group refused to support any taxes.
Those dividing lines remain as lawmakers return Monday for a 10-day special session that is the last-ditch attempt to close a budget gap and avoid hundreds of millions of dollars in cuts across state programs when the new budget year opens July 1.
Edwards and House Republican leaders use different numbers to describe the size of the shortfall, based on differing points of comparison. What is clear, though, is more than $500 million in spending items included in the budget passed by lawmakers currently don’t have the dollars to pay for them, a larger figure than the House GOP leaders are using.
Without new dollars, the budget signed into law will cover about 70 percent of tuition costs for the TOPS program. Higher education will lose more than $90 million in state financing. Money sent to sheriffs, district attorney offices, and other public safety programs will be cut. Spending across state agencies will drop.
Edwards and Senate leaders say the cuts would be deeply damaging. Barras and Harris say some money needs to be raised to shrink the size of the reductions, but they say agencies could stand to be trimmed, suggesting government growth has outpaced the state’s economy.
Some of the most conservative House GOP lawmakers say no additional money is needed. They suggest hundreds of millions of dollars could be stripped by doing a better job of combatting waste and cutting unnecessary spending. They don’t offer a list of specific cuts.
Even the expiring temporary taxes driving the budget shortfall are described in sharply different terms.
Nearly $1.4 billion in temporary taxes are expiring July 1, the largest expiration tied to a temporary 1 percent sales tax that is falling off the books. Increased collections in other tax types will offset some of the hole, leaving the state to collect nearly $650 million less in general tax revenue next year.
Edwards says by partially renewing the sales tax, Louisiana residents and businesses would see a massive tax cut of around $500 million starting on July 1, because they’ll be paying less in taxes than they were this year.
House Republican leaders, including those who support some sort of a partial sales tax renewal, say any taxes they pass will be a tax hike, since residents and businesses aren’t slated to pay those sales taxes come July 1.
The 10-day special session will determine if the competing narratives force continued gridlock or if the philosophical dispute can be bridged days before the new budget year starts.
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EDITOR’S NOTE: Melinda Deslatte has covered Louisiana politics for The Associated Press since 2000. Follow her at http://twitter.com/melindadeslatte
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