BATON ROUGE, La. (AP) — Though the just-ended special session was largely a bust, Louisiana's working poor families won a tax break from state lawmakers in the final hours before the session ended.
Some Democrats, particularly members of the Legislative Black Caucus, withheld their support for a sales tax renewal until they successfully expanded a tax break program for the working poor, called the Earned Income Tax Credit.
The $21 million annual tax break expansion reached Gov. John Bel Edwards' desk, included with another provision sponsored by Rep. Katrina Jackson to raise $34 million for next year's budget. The governor is expected to sign the measure into law.
The higher tax break begins in 2019.
The sales tax renewal — to extend part of a 1 percent state sales tax expiring July 1 — failed in a last-minute collapse of the special session Monday. Edwards intends to try again in another special session later this month, to help stave off deep cuts in higher education and public safety programs and across state government on July 1.
In the closing hours of the session, a group of Democrats held up action in the sales tax debate until they won passage of the tax break expansion. Other versions of the proposal had been twice killed in the House tax committee.
Supporters said the Earned Income Tax Credit, known as the EITC, helps low-income families with children who are harder hit by sales taxes, and encourages people to work. They described the credit expansion as needed to offset the effect of what was then an expected sales tax renewal.
They said the dollars returned to taxpayers would immediately be pumped back into the economy, spent on groceries, clothing and household items.
"This bill in its current form helps families around Louisiana," Jackson, a Monroe Democrat, told her colleagues Monday.
Louisiana allows low-income workers who qualify for the federal EITC program to take a state individual income tax credit equal to 3.5 percent of the federal credit. About one in three tax filers in Louisiana claim the credit, according to the Louisiana Budget Project, a group that advocates for low- to moderate-income families.
Jackson's bill will increase the amount of the state tax break to 5 percent of the federal credit, from Jan. 1, 2019, through Dec. 31, 2025.
Expansion of the tax credit was supported by a list of groups, including AARP-Louisiana, the United Way, teacher unions, the Louisiana Conference of Catholic Bishops and the Louisiana Budget Project.
Opponents of the measure worried about the $21 million annual cost to the state for expanding the tax credit, particularly at a time when lawmakers already were debating ways to fill a budget shortfall.
"The timing is not good," Rep. Barry Ivey, a Baton Rouge area Republican, said during one debate on the expansion proposal.
House Bill 18: www.legis.la.gov
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Posted on Fri, June 8, 2018
by By MELINDA DESLATTE Associated Press