Louisiana state senators are shrinking the scope — and the price tags — of tax break bills as they prepare to shape their version of next year’s budget and account for the business tax cuts that could reach final passage.
Some lawmakers are hopeful they can wrap up their budget, tax and other work a few days early in the ongoing special session that must end June 30. To do that, the House and Senate will need to reach agreement on how to handle the state’s finances — and how much they want to cut taxes for businesses amid the ongoing coronavirus outbreak.
The Senate’s tax committee Monday whittled down the scale of several House-approved bills to expand tax credits, rebates and incentive programs that benefit business. Some of the changes would limit certain tax break expansions to businesses with 50 or fewer employees.
“We’re trying to really tailor this to small businesses that really need our help,” Sen. Bret Allain, the Franklin Republican who chairs the tax committee, said as he added the limits to one bill.
The Senate Finance Committee is planning Wednesday to unveil its version of a $34 billion state operating budget, accounting for where it will cut spending to cover the costs of the tax breaks that appear likely to win passage, Republican Chairman Mack “Bodi” White said.
The majority-Republican Legislature called itself into the special session to wrap up work on the budget for the financial year that begins July 1 — and to work on a package of business tax breaks pitched as a way to help restaurants, retailers and others recovery from virus-related closures. The special session agenda was largely drawn up by business lobbyists.
Several proposed tax measures represented a sizable hit to the state’s tax collections, but many of those have been shelved or greatly scaled back. Some lawmakers say the measures still would take too much money away from the treasury and could force spending cuts on public safety, education programs and health care.
“We keep saying the fiscal note’s just a few million here and a few million there,” said Sen. Jay Luneau, an Alexandria Democrat. “They’re adding up.”
The estimated cost of the tax breaks nearing final passage was unclear after the flurry of changes made by the Senate committee Monday.
One of the larger tax cuts nearing final passage would benefit the gambling industry.
The bill by Sen. Ronnie Johns, a Lake Charles Republican, would give riverboat casinos, the land-based casino in New Orleans and slot machines at Louisiana’s racetracks an estimated $11 million tax cut in the upcoming budget year and would grow larger each year.
Johns argued the industry will pour that money back into its operations, generating additional economic activity and tax collections for the state.
The House tax committee Monday advanced Johns’ legislation to the full House for debate. The Senate already has backed the idea.
Also nearing final passage is a separate business priority, a package of civil litigation system changes that would lessen damage awards against insurance companies in car accident lawsuits.
Lawmakers passed a similar bill in the regular legislative session, but Gov. John Bel Edwards vetoed the measure.
The Democratic governor hasn’t said if he’ll support the scaled-back version that won Senate passage Monday in a 29-9 vote. The proposal by House Speaker Clay Schexnayder, a Republican, heads back to the House for consideration of Senate changes.