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Logjam breaks: House backs cigarette tax, Senate offers cuts

Logjam breaks: House backs cigarette tax, Senate offers cuts

BATON ROUGE, La. (AP) — Gridlock in Louisiana's special legislative session lifted slightly Thursday, as senators unveiled their plan to rebalance the state's short-term budget gap and lawmakers in the House began advancing some tax measures needed to make the plan work.

As of press time Friday morning, the two sides appeared to remain at odds, however, about the right mix of taxes and cuts to close a shortfall once estimated to top $900 million in the financial year that ends June 30 and to address a $2 billion gap in the fiscal year that begins July 1.

"We're beginning to get a little breathing room, but don't think it's all done. We've still got a long way to go," Senate President John Alario, R-Westwego, said of the budget plan.

The special session must end by Wednesday. Lawmakers can't raise taxes in the regular legislative session that begins in mid-March.

Republican leaders in the House had stalled action on taxes for several days, while waiting for the Senate to unveil its budget cut recommendations Thursday. House Republicans said they wanted to know what gap remained before deciding what tax increases to support.

After the Senate Finance Committee reworked the budget cuts, the House started considering additional tax changes, agreeing to a cigarette tax increase that would help raise money for the treasury quickly.

Senators backed $69 million in fewer reductions than the House sought, and they propose to largely shield public colleges and health services from steep reductions. They reversed House-backed cuts that would nearly shutter the education department.

"In an effort to make sure that we didn't destroy agencies that needed to operate and that were important to what we do on a regular basis, we tried to minimize those cuts," said Finance Chairman Eric LaFleur, D-Ville Platte.

The budget cut package moves next to the full Senate for debate.

Senators' plan would use money from a state debt refinancing — and would require striking a deal with the House on additional taxes, needing lawmakers there to support about $67 million more in tax hikes than it has supported, including a cigarette tax backed Thursday. Lawmakers in the House voted 73-25 to boost the cigarette tax from 86 cents per pack to $1.08.

It's unclear if the House will agree to raise additional taxes, and the Senate is constrained because most tax measures must begin in the House. Meanwhile, the House's budget committee chairman raised concerns about the debt refinancing senators propose to raise $80 million for this year's budget.

House Appropriations Chairman Cameron Henry said the maneuver would do nothing to help the state stabilize its long-term budget problems because the refinancing would generate a one-time, lump sum payment.

"By reducing cuts and increasing one-time money, you're just making the problem worse in the future. That's how we got in this place to begin with," said Henry, R-Metairie.

He said he'd like to see higher cuts than what the Finance Committee proposed.

Senators said that without the patchwork financing — and the extra tax revenue they're seeking from the House — colleges and health services would face deep slashing.

Among the many grim scenarios outlined with such cuts, managers of Louisiana's safety net hospitals have threatened to walk away from the deals, and leaders of the LSU medical schools say the cuts could crater their programs.

While the House and Senate haven't reached a deal that fully closes this year's budget gap, Alario said they're also far short of raising enough money to avoid damaging cuts next year.
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Follow Melinda Deslatte on Twitter at http://twitter.com/melindadeslatte

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