Louisiana Senate backs budget, $540M in taxes to finance it

Posted at 7:14 PM, Jun 03, 2018

BATON ROUGE, La. (AP) – Louisiana’s senators agreed Sunday to a $29 billion state operating budget for the financial year that begins next month, along with about $540 million in taxes necessary to pay for it.
The spending plan for the fiscal year that begins July 1 would avoid worst-case scenario cuts discussed for months. Senators voted 38-1 Sunday night for the budget proposal and then later backed the centerpiece sales tax bill with a 29-9 vote.
But the House has yet to agree to the plans in a special session that must end Monday by midnight.
The House has backed $400 million in taxes, leaving the two chambers trying to broker a tax and budget deal in the remaining hours of the session. Lawmakers remained uncertain if an agreement would be struck.
In the Senate’s 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. The foster care program would be expanded to pay for students to finish high school or until they reach 21 years old, rather than ending payments when a child turns 18.
"We did the best that we could," said Senate Finance Chairman Eric LaFleur, the Ville Platte Democrat who handles the budget in the Senate.
If enough taxes aren’t passed by lawmakers to pay for the budget proposal, 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 care services would be shielded from the slashing.
Even with the taxes, some areas still would take cuts to keep the numbers in balance. On the list for reductions are the Office of Juvenile Justice, the attorney general’s office, the agriculture department and the agency that oversees state parks and museums.
LaFleur said senators prioritized the areas they wanted to protect: "It’s taking money from somebody and giving it to another."
Gov. John Bel Edwards praised the budget proposal, saying it would avoid "catastrophic cuts to critical state services."
"I am confident that the Legislature can get its work done in the time we have left together and continue to build on the momentum we are seeing in Louisiana," the Democratic governor said in a statement.
Only Sen. John Milkovich, a Keithville Democrat, voted against the budget proposal. He pushed for hiring and pay freezes, along with funding cuts in some area that were rejected by senators.
Lawmakers are in a special session called by Edwards to close a budget gap caused by expiring temporary taxes. Louisiana is expected to bring in $648 million less next year, and the governor wanted lawmakers to replace that amount.
Edwards will not get that full amount from the majority-Republican Legislature.
The House backed a sales tax bill that would renew one-third of an expiring 1 percent sales tax, eliminate some sales tax breaks and continue sales tax charges on business utilities.
Louisiana’s state sales tax rate currently is 5 percent, dropping to 4 percent on July 1. The House-passed bill would move the rate to 4.33 percent on July 1. The proposal would expire in five years.
The Senate passed a 4.5 percent sales tax rate and eliminated further sales tax breaks. The proposal would expire in seven years.
The budget proposal also assumes lawmakers will agree to divert $53 million in oil spill recovery money from state savings accounts to instead spend on general operating expenses.


Today, Gov. John Bel Edwards released the following statement on the budget compromise passed by the Louisiana State Senate:

Today, we moved one step closer to avoiding catastrophic cuts to critical state services.  I want to thank the bipartisan group of senators who have worked across the aisle to build responsible consensus.  This is not an easy task.  Without replacing the revenue needed to fully fund our critical priorities at their current funding level, tough choices have to be made.  We have worked together to minimize the negative impact on the people of Louisiana, but make no mistake, deep cuts will still be imposed in some areas. However, these strategic spending cuts can be made in a more responsible way, while still reducing the tax burden on the people of Louisiana by more than $400 million.  I am confident that the legislature can get its work done in the time we have left together and continue to build on the momentum we are seeing in Louisiana.

In a release, the Governor highlighted key points of the budget compromise.

  • A reduction of the tax burden on the people of Louisiana exceeding $400 million
  • Strategic spending cuts of more than $200 million
  • Fully funds higher education, TOPS and Go Grants
  • Funds the Louisiana Department of Health, including critical health care services for seniors, those with disabilities, partner hospitals, and medical schools in Shreveport and New Orleans
  • Funds a partial opening of the Acadiana Center for Youth in 2019