Gov. Edwards proposes serious tax hikes

Gov. Edwards proposes serious tax hikes

NEW ORLEANS, LA (WVUE) - Senate President John Alario commends Governor John Bel Edwards for what he calls a straight forward speech without smoke and mirrors. Alario is preparing to head to Baton Rouge for the start of the special session this weekend.

"For this year, we're looking closer to $850 to $900 million between now and June 30. Next year, there's about a $2 billion deficit, so what he's presenting is just devastating," Alario said.

Edwards made it clear in his speech that the state is in a financial crisis, and the only way to solve it is to create new revenue.

"We've been hearing a lot about a sales tax hike. Why is that? It's because it's one of the few measures that can generate revenue immediately," FOX 8 political analyst Mike Sherman said.

Edwards proposed a one cent hike in the state's sales tax, creating about $200 million in revenue. He's also looking at making changes to the state's inventory tax.

"At the state level, the hot topic is getting rid of the inventory tax credit. That's a huge cost to the state, to give businesses this tax credit. Here's the next question - and this is the golden question: Do you force local governments to give up the inventory tax?" Sherman said.

If that happens, Sherman said local governments will certainly suffer.

Alario admits that the cuts are already deep, but he believes legislators should carefully go through the budget first to see if there is anything else to cut before imposing more taxes.

"The treasurer offered some suggestions. Some of what he offered is a legitimate concern, and we ought to go back and check to see if there is any way to make those cuts, and then and only then, we should look at the revenue measures," Alario said.

Governor Edwards also proposed tapping into the state's rainy day fund to pull another $128 million into the budget.

"Well, that's what it's for. It's raining awfully hard right now, so if we didn't use it, it would remain in the fund and we couldn't use it for the next couple of years," Alario said.

Alario said legislators are gearing up for a tough couple of weeks ahead.

"It's going to take a lot of brave people. We've got to go make some tough decisions and make it happen," he said.

The senator said lawmakers will also decide whether to support the governor's proposal to boost the cigarette tax. That will generate about $17 million.

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