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Work in Louisiana tax session appears headed to final hours

Work in Louisiana tax session appears headed to final hours

BATON ROUGE, La. (AP) — If Louisiana's lawmakers are going to broker a deal on taxes and spending, they seem poised to work into the final hours of their special budget-balancing session to reach one.

Senators are planning Saturday to unveil their multibillion-dollar budget proposal for the financial year starting July 1. The full Senate is expected to debate that budget and the centerpiece sales tax bill to finance it Sunday.

Whatever the Senate passes will head back to the House for consideration.

The session must end Monday by midnight.

Louisiana is estimated to take in $648 million less in general tax dollars next year because of expiring taxes. Gov. John Bel Edwards wants replacement taxes to avoid deep cuts across government. The House backed a $400 million tax plan and a budget proposal to match. Senators are considering a larger tax and spending package.

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BUDGET GAPS

The Senate Finance Committee spent Friday listening to agency leaders outline the holes they see in the nearly $29 billion state operating budget passed by the House.

While the spending plan would slash less deeply than a prior version vetoed by the Democratic governor, the additional tax revenue included in the spending plan isn't enough to continue all programs and services next year.

The TOPS college tuition program would cover only 90 percent of tuition costs. The Louisiana State Police said it wouldn't have money to train new troopers and would be forced to shrink overtime spending, causing longer waits for troopers to respond to calls. The Office of Juvenile Justice would close five regional offices.

The health department estimates its reduction would reach $540 million with lost federal and other matching dollars. Health Secretary Rebekah Gee said the cut would heavily hit substance abuse and mental health services in a state already struggling to meet those needs.

"That's cuts in services to families. We are very concerned about the impact of this," Gee said. "We're in the midst of an opioid crisis."

While protections were included in the House budget proposal for safety-net hospitals and nursing home residents, Gee said programs that help the elderly and disabled live in home- and community-based care remain on the chopping block.

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SALES TAX DEBATE

The House backed a sales tax bill sponsored by GOP leader Rep. Lance Harris that would renew one-third of an expiring 1 percent sales tax, eliminate some sales tax breaks and continue sales tax charges on business utilities.

Louisiana's state sales tax rate currently is 5 percent, dropping to 4 percent on July 1. Harris' bill would move the rate to 4.33 percent on July 1. Edwards wants a 4.5 percent rate.

A Senate committee rewrote the bill to boost the money it would raise annually, stripping high-dollar exemptions for businesses that shield some utility costs and purchases of manufacturing machinery and equipment from sales taxes. Harris said that can't win House passage, and it's unclear if that approach can even get support from the full Senate, amid strong opposition from business groups.

Stephen Waguespack, president of the Louisiana Association of Business and Industry, said the senator's rewrite is "specifically targeted at those employers who make up the backbone of our fragile economy and provide opportunities for thousands of Louisianans."

Also winning House and Senate passage is a measure to scale back an individual income tax break that Louisiana allows for taxes paid to other states. It would raise nearly $34 million annually. A final bill version must be worked out before it can reach the governor.

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Follow Melinda Deslatte on Twitter at http://twitter.com/melindadeslatte