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Edwards wants more special session progress, addresses credit downgrade

Gov. John Bel edwards (FOX 8 Photo/FILE) Gov. John Bel edwards (FOX 8 Photo/FILE)
BATON ROUGE, LA (WVUE) -

Gov John Bel Edwards said Friday there is still a lot of hard work that must be done as the second week of the special session came to an end.

At a mid-morning Friday news conference inside the State Capitol, Edwards applauded the state House for getting the ball rolling on spending cuts and proposed tax hikes.

"We have not come close to fixing the problem,” Edwards said.

On Thursday the House approved a one-cent increase in the state’s sales tax. It would take effect in April if the Senate approves, and would generate over $200 million for the fiscal year that ends June 30.

But while the governor proposed the sales tax hike as one of the short-term solutions to the money crunch, he does not favor the 18-month limit that House members put on it.   

"So sun-setting this change in the fall of 2017 simply doesn't make sense," Edwards said. "There is no way to get to the new structure to have the revenue necessary to allow the penny to fall off, and so the 18 months is not a realistic number for that reason.” 

But many House Republicans who do not want to raise taxes insisted that the tax hike have a time limit spelled out in the legislation.

"If we have to have another special session, we have to have another special session. I can tell you the temperment of a lot of people is we don't need to do it more than 18 months,” said Rep. John Schoder, R-Covington.

House Speaker Pro Tem Walt Leger said making the time frame for tax hike too short will create headaches down the road.

"I recognize the need to have a distinct date when this will end and I would support that. I would also support putting in some revenue triggers that would cause the penny to roll off sooner, but we've got to make sure we don't do something that's so temporary that it doesn't address the needs of the $950 million shortfall and the $2 billion for the next fiscal year,” said Leger, D-New Orleans.

The governor stressed that the additional revenues from the sales tax will be needed until an overhaul of the state’s tax code can be achieved - something that will require constitutional amendments.

"I don't believe anybody thinks that can happen before 2017 session that we get that comprehensive restructuring done."

Edwards' press conference came a day after Moody’s downgraded the state’s credit rating because of years of budget crises and the low oil prices that also affect the state’s bank account. That means the state will have to pay more to borrow money.

"Making the work that we do here more important and more urgent,” said the governor about the credit downgrade.

 And Edwards is reminding lawmakers and the general public that the state's credit rating may take another hit if solutions are not realized soon.

“It wasn’t just a downgrade. We’re also on a negative watch from Moody's, which means further downgrades may happen if we don’t in a responsible way address this budget crisis that we have,” Edwards said.

Still, the governor is optimistic is optimistic that Republicans will embrace enough of his tax package to avoid compounding the budget mess.

“The consequences of failure are too dire to contemplate. This is the opportunity that we’re given.  If we don’t take advantage of it, I can assure you we will have another special session to raise revenue and it will be after catastrophic cuts are in place,” he said.

Copyright 2016 WVUE. All rights reserved.

Copyright 2016 WVUE. All rights reserved.

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