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Gov. Edwards' budget ideas unveiled, so negotiations begin

9 months 1 day 19 hours ago January 20, 2016 Jan 20, 2016 Wednesday, January 20 2016 January 20, 2016 4:42 PM in News
Source: Associated Press
By: Melinda Deslatte

BATON ROUGE - Reaction to Gov. John Bel Edwards' tax hike proposals for closing Louisiana's massive budget holes is mixed. Legislative leaders say they're encouraged by the broad array of options, but others are showing resistance to the ideas.

The Democratic governor offered a "menu of options" that includes increased sales, tobacco and alcohol taxes; boosted taxes on phone service and car rentals; and lessened business tax breaks.

Republican Senate President John Alario said Wednesday he appreciates Edwards didn't put many limitations on what he'd consider. Rep. Lance Harris, chairman of the House Republican delegation, says he's pleased to have ideas in advance of a mid-February special session, for lawmakers to start deliberating.

But other Republicans and business leaders questioned why Edwards hadn't offered a corresponding list of proposed cuts to state spending.

Gov. Edwards has released a "menu of options" for balancing the budget, revenue-raising ideas that could hit businesses and consumers with higher tax bills. Lawmakers will consider the proposals in a three-week special legislative session that Edwards says he'll call for Feb. 14. It's unclear how much each item would generate.

Included on the list are:

- Increasing Louisiana's state sales tax from 4 percent to 5 percent, with fewer exemptions allowed for the new tax.
- Increasing the state telecommunications tax charged from 2 percent interstate and 3 percent intrastate to a flat 5 percent rate.
- Increasing the state's tobacco tax from 86 cents per pack of cigarettes to $1.08 per pack.
- Increasing the state income tax for middle- and upper-income residents who itemize their tax deductions, by cutting the percentage of federal excess itemized deductions those taxpayers can deduct on state income tax forms.
- Increasing taxes on alcohol.
- Eliminating the state tax deduction for federal income taxes in exchange for lower individual and corporate tax rates.
- Charging corporate franchise taxes on more businesses.
- Enacting a state car rental tax.
- Charging a state sales tax on hotel rooms booked through online travel companies.
- Making permanent a recently-passed 28 percent across-the-board cut on many tax break programs and a 20 percent cut on certain business tax rebate programs. The reductions are due to expire on June 30, 2018.
- Repealing the sales tax exemption for business utilities, requiring businesses to pay the 4 percent existing sales tax, but with provisions to lower the tax if natural gas prices rise.
- Reducing the tax credit businesses can receive from the state for paying local property taxes on their inventory.
- Reducing a tax credit that insurance companies receive for payment of insurance premium taxes.
- Providing a method for collecting state sales tax from online retailers.
- Reworking tax loopholes.

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