Louisiana session reaches final day with tax votes pending
BATON ROUGE, La. (AP) — Louisiana lawmakers Thursday were completing a nine-week legislative session where they spent hefty sums of coronavirus recovery money, worked to overhaul the state’s tax structure and found themselves battling over social issues that nearly derailed the financial debates.
Years of cash crunches and financial worries gave way to a budget largesse, with federal pandemic assistance pouring into Louisiana along with an unexpected boom in state tax collections. The majority-Republican Legislature used the new cash to give pay raises to teachers, boost spending on public colleges and student aid programs and steer tens of millions to pet projects back home.
Federal dollars will pay for road and bridge work, water system improvements, tourism marketing, hurricane recovery and grant programs to businesses. Some of the aid will help shore up the state’s nearly-bankrupt unemployment trust fund.
The House and Senate brokered a bipartisan deal in the dwindling hours of session on a complicated set of tax swaps they hope to persuade voters to pass in the fall election, arguing the measures will bring more sustainability to the state’s tax structure by disentangling it from federal tax payments. The Senate still had to take one last set of votes on the bills Thursday.
“We’re taking the first step ... to right-size Louisiana, to move our state forward,” said Rep. Gerald “Beau” Beaullieu, a New Iberia Republican who handled some of the tax bills in the House.
Awaiting a final agreement was a plan championed by Senate Republican leaders to steer a portion of state sales taxes charged on purchases of cars and trucks to road and bridge projects in future budget years. But that would strip dollars from the state general fund that are used to pay for health care programs, education, public safety services and other government operations.
The legislative session must end by 6 p.m.
Lawmakers were expected to put the finishing touches on the regulations for sports betting to start this fall. They agreed to expand Louisiana’s medical marijuana program and eliminate jail time for possession of small amounts of pot for recreational use. And they enacted tougher regulations for how colleges must respond to allegations of sexual assault, harassment and other misconduct — legislation that grew out of a recent scandal at Louisiana State University.
Gov. John Bel Edwards, a Democrat, was expected to veto measures sent to his desk to ban transgender athletes from competing on girls’ sports teams in schools and to do away with the permitting requirements to carry a concealed handgun.
Fights over social issues — such as how to address police misconduct and how to teach issues of race in schools — provoked racial tensions in the House mid-session that threatened to derail the tax restructuring priorities of Senate President Page Cortez and House Speaker Clay Schexnayder, both Republicans. But Schexnayder, who was elected with the help of Black lawmakers, managed to steer the chamber through the feuds, at least enough to broker the tax deals.
If approved by voters statewide, the main tax proposal would get rid of personal income tax and corporate tax deductions for federal income taxes paid in exchange for lowering the state’s income tax rates. Louisiana also would permanently eliminate the corporate franchise tax for small businesses and lower the tax rate for others.
The tax package is more generous to corporations than individual taxpayers.
Lawmakers said they expect to largely raise the same amount of revenue, to stay in compliance with federal coronavirus aid legislation that won’t allow the assistance to flow to states that cut taxes. But a nonpartisan financial analysis of the bills suggests the state could lose some money in the early years of the changes.
The measures were the main pieces of a widespread revamp of Louisiana’s tax laws pushed by GOP leaders to address bipartisan criticism by government watchdog groups, tax experts and economists that the state’s tax provisions are unnecessarily complex.
But complaints that Louisiana’s tax structure is riddled with loopholes that make the system less fair went unaddressed this session, amid opposition from special interest groups and business lobbyists.
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