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Session roadblock: Sales tax falls short in Louisiana House

Session roadblock: Sales tax falls short in Louisiana House

BATON ROUGE, La. (AP) — The Louisiana House on Friday spurned a more than $360 million sales tax renewal, throwing a budget-balancing deal into jeopardy as the state edges closer to a new financial year with no spending plan in place.

Rejection of the measure raised questions about whether Gov. John Bel Edwards and lawmakers can reach a tax deal to avoid deep cuts to education, health care and public safety programs in the budget year starting July 1.

The sales tax is seen as a critical piece of any agreement that could be struck, but House GOP leader Lance Harris couldn't cobble together enough votes from Republicans and Democrats for his proposal.

Lawmakers voted 63-38 for the measure, with bipartisan support and opposition. It needed 70 votes to pass.

Legislative leaders said they intend to spend the weekend trying to find a way to pick up more votes. The House returns on Memorial Day to reconsider the bill, along with other smaller-dollar tax measures.

Despite the setback, Republican and Democratic leaders refused to concede defeat.

"I was actually encouraged at the progress we made between last night and today, really on both sides," said Republican House Speaker Taylor Barras. "We're 95 percent there, and we'll continue to work it and see what the issues are for some of the members."

House Democratic leader Robert Johnson said: "I think we can get there eventually. I think no one wants to see this implode."

That's precisely what happened in February, when an earlier special session called by Edwards to pass taxes collapsed in gridlock in the House, where most tax bills must start.

The Democratic governor said he was disappointed with Friday's outcome. But in a statement, he said the bipartisan vote "gives me hope that we can come to an agreement very soon. We have to."

About $1.4 billion in temporary taxes passed by lawmakers in 2015 and 2016 to plug budget holes disappear July 1. With other tax offsets, Louisiana is estimated to get $648 million less in general tax dollars next year.

Edwards wants lawmakers to pass $648 million in replacement taxes. House Republican leaders are seeking a smaller amount, but agree some revenue is needed to avoid damaging cuts.

Harris' bill would renew one-third of an expiring 1 percent sales tax, eliminate some sales tax breaks and continue sales tax charges on business utilities. The changes would again be temporary, lasting until 2023.

Harris said the tax measure would keep government growth more in line with the state's economy, forcing some spending cuts.

"Is it comfortable? No. But I don't think it would be catastrophic" to make cuts, he said.

Louisiana has a state sales tax rate of 5 percent that is slated to fall to 4 percent on July 1. Harris' bill would keep the rate at 4.33 percent. Edwards wants it to be 4.5 percent, but an effort to make that change on the House floor failed.

House votes change depending on the tax rate. Some lawmakers said they can't support anything less than the 4.5 percent rate, while others said they can't support more than 4.33 percent. Some Republicans refuse any tax renewal, while some Democrats disagree with using a sales tax approach, saying that disproportionately hits the poor.

Whether they liked the rate or not, lawmakers pushing for passage of Harris' bill urged support simply to keep negotiations going, move the debate to the Senate and stop the session from stalling.

"I am frankly sick and tired of hearing about the fiscal cliff," said Rep. Sam Jones, a Franklin Democrat and close ally of the governor. "This bill does not fix it. But it's a start."

The special session must end June 4.

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House Bill 27: www.legis.la.gov