Sales tax talks hit ‘extreme deadlock’ in Louisiana House

Posted at 10:11 AM, Jun 22, 2018
and last updated 2018-06-22 11:11:10-04

BATON ROUGE, La. (AP) – Lawmakers in the Louisiana House are having trouble bridging the same divides that left two previous special sessions this year without a tax deal, disagreeing about fractions of a penny.
As the House returns Friday for further negotiations, lawmakers are wondering if this third special session called by Gov. John Bel Edwards will end with the same inaction as the first.
Republican House Speaker Taylor Barras urged lawmakers Thursday night to continue tax talks, to try to break the stalemate.
"I don’t think it’s any secret to anyone in the building, we are at an extreme deadlock," he said.
Steep budget cuts will hit college campuses, the TOPS tuition program, public safety services, district attorneys, sheriffs, state parks, state-run public schools and education programs in July if lawmakers don’t agree to additional taxes. Louisiana’s social services agency says the food stamp program will be eliminated.
"What we need is movement from the two corners," Barras told lawmakers. "No one has budged in the last three days."
This special session, which must end June 27, centers on whether part of a 1 percent sales tax should be continued next month, when the state’s sales tax rate is scheduled to drop from 5 percent to 4 percent. Renewal takes a two-thirds vote, requiring a mix of Republican and Democratic votes to reach the two-thirds threshold for passage.
Edwards, House Democrats and some moderate House Republicans want to renew half the sales tax, a proposal previously backed by the Senate but defeated in the House on Thursday. House Republican leaders are backing a 0.4 percent renewal rate.
Financially, the difference is 10 cents in sales tax charged for every $100 purchase – and $86 million for next year’s budget. Philosophically, the difference might be even greater.
House GOP leaders say they’re trying to contain government growth. The say they’ve compromised by moving from the no-tax stance of many members to first offering a 0.33 percent renewal rate in the last special session and a 0.4 percent renewal rate this time. They say Edwards and Democrats haven’t budged.
The Democratic governor and supporters of the half-percent renewal rate say without that full amount, cuts across state government will be too deep and too damaging. They say people still will pay fewer taxes than they do now.
The 0.5 percent renewal rate would raise the $506 million needed to fully finance the budget previously passed by lawmakers that takes hold in July. The 0.4 percent would raise more than $420 million.
A U.S. Supreme Court ruling that paves the way for states to collect more sales taxes from online purchases simply added more confusion to the already uncertain negotiations, because it’s unclear when that might add more money to the state treasury and how much.
Frustration was evident.
Rep. C. Denise Marcelle, a Baton Rouge Democrat, told Barras before the House adjourned Thursday night: "I think we’ve pretty much wasted an entire day and we’re running out of time."