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Wednesday, April 17, 2019

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Budget-balancing special session reaching its end Wednesday

Budget-balancing special session reaching its end Wednesday

BATON ROUGE, La. (AP) — College students and parents of children with developmental disabilities were waiting into the final hours of Louisiana's special legislative session to learn if Gov. John Bel Edwards and lawmakers would broker a tax deal to stave off hefty cuts to their programs and services.

The Democratic governor and leaders of the majority Republican Legislature negotiated behind closed doors on a possible budget and tax agreement that, if reached, would require a flurry of votes before the special session ends Wednesday at 6 p.m.

House Speaker Taylor Barras urged his colleagues "to find solutions," saying Louisiana's residents were expecting them to fill the budget gaps for both years.

"We cannot leave here tonight without solving the problem that I believe could be catastrophic," said Barras, R-New Iberia.
He acknowledged the tax votes were difficult for many in the majority Republican House, and he said some of the votes will leave him with "heartburn."
"But we owe it to our constituents to do something," he said, asking them to "consider the hard vote."

Louisiana faced a shortfall estimated to reach $900 million that must be closed within three months, and a gap estimated to top $2 billion in the fiscal year that begins July 1, the worst budget woes the state has seen in nearly 30 years.

Edwards and lawmakers appear to have agreed to $400 million in patchwork financing and more than $160 million in spending reductions. But they have not agreed on enough taxes to fill the remaining holes.

Senate President John Alario, R-Westwego, said he was confident a deal could be struck that would stop the threat of damaging cuts to public colleges and health care services this year — but he worried about next year's spending plan.

Edwards' chief budget adviser, Commissioner of Administration Jay Dardenne, agreed, saying the gulf to closing next year's budget shortfall "is pretty steep."

Next year's gap is estimated to range from $500 million to $1 billion, depending on who's doing the estimating and what's included in the count.

Asked what the Senate would be doing early in the day, Alario quipped: "Praying." He added: "The day's still got some hours left in it. Hopefully, reasonable people will realize how bad the cuts are going to be next year."

Already passed are a 22-cent per pack cigarette tax hike that begins April 1, a new tax on hotel rooms booked through short-term rental sites like Airbnb and a reinstated car rental tax. Some business tax breaks will be lessened. And the state will try to collect more sales taxes from online retailers.

Expected to reach final passage are an alcohol tax hike that would raise the cost of a case of beer by 18 cents and a sales tax hike on consumers and businesses.

The 25-day special session began on Valentine's Day, with dire warnings of college campus shutdowns, shuttered safety net hospitals for the poor and eliminated health programs for the disabled and elderly.

The session was a stark greeting for three dozen freshmen lawmakers who barely learned how to cast votes before being asked to choose between the highly unpopular choices of raising taxes or taking a hatchet to higher education and government services.

In office since January, Edwards said the budget instability he inherited from Republican former Gov. Bobby Jindal was so awful that without higher taxes, the cuts threatened to keep the LSU Tigers from playing football this fall.

But House Republicans have bottled up many of the governor's proposals.
Both the House and Senate have agreed to raise Louisiana's 4-cent state sales tax by another penny for every dollar spent. But a group of House Republicans — backed by business organizations — has proposed raising it even higher.

Democrats have objected to anything higher than the 1-cent tax hike, saying it would too heavily hit the poor and would let businesses off too easily in sharing the burden of balancing the budget.

Appearing to gain traction was a proposal to reduce sales tax breaks, including those that businesses get for their utility costs and their equipment purchases. The move is called "cleaning a penny," to suggest removing exemptions from a penny of the sales tax.

"For the moment everything seems to revolve around cleaning pennies," said Rep. Sam Jones, D-Franklin.

The governor at one point was pushing changes to the income-tax brackets that could have middle- and upper-income taxpayers paying more. But that, too, has hit resistance.
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