Legislature eyes additional sales tax increase to plug budget ho - FOX 8 WVUE New Orleans News, Weather, Sports, Social

Legislature eyes additional sales tax increase to plug budget hole

State Capitol/FILE (FOX 8 Photo) State Capitol/FILE (FOX 8 Photo)
BATON ROUGE, LA (WVUE) -

The pressure is on state lawmakers both from inside the Capitol and outside. The special session must end Wednesday, but all of the red ink in the budget hasn't been erased. Some lawmakers now want the sales tax to go up more than a penny.

Lawmakers have a lot of people breathing down their necks, including Gov. John Bel Edwards, who called the session to find solutions to the billion-dollar deficit for this year and the $2 billion deficit for the new budget year that starts July 1.

The House has been slow in passing tax hikes proposed by the governor, and there's been state Senate disagreement over some spending cuts. Both chambers passed bills to hike the state sales tax by a penny, but it's not finalized because of differences over how long the tax hike should remain in place.

With pressure from the business lobby, which is fighting more business taxes, and little time left to get other tax measures through, some in the House want to pass a different measure to increase the tax beyond the penny hike.

 “Any sales tax increase, the one penny alone - that hits business at about 47 percent, and what we’re trying to do is the governor’s original plan had about $175 million shortfall that he wasn’t going to fund,” said Rep. Cameron Henry. “The House is trying to at least cover a hundred of that, cover the public-private partnerships and some of the cuts to higher ed, so we’re going above and beyond what he really had a plan for.”

A lot is riding on the outcome of the session in terms of colleges and universities. The head of state-funded higher education went before the Baton Rouge Press Club on Monday. Dr. Joe Rallo said under the best case scenario, public colleges and universities would be cut almost $87 million this fiscal year, and higher ed would face a 27 percent cut for the fiscal year that starts July 1.

"For the rest of this year we will start seeing classes cancelled, people laid off because of the inability for people to make payroll,” Rallo said. “For next year, we're looking at an 80 percent reduction in TOPS. That means that instead of 45,000 students being TOPS eligible, it'll be about 9,000."

Legislative leaders have been huddling all afternoon trying to reach compromises. One of the taxes the Legislature could agree upon and finalize was the 22 increase in the cigarette tax.

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