BATON ROUGE, La. (AP) — The Louisiana House agreed Thursday to raise $670 million for next year's budget by scaling back tax break programs and raising cigarette taxes, diverging from Gov. Bobby Jindal's recommendations and still falling short of the budget-balancing goal.
The dollars would be used to reduce some of the $1.6 billion shortfall for the fiscal year that begins July 1, but House leaders had wanted to drum up about $270 million more than they got with the 11 tax bills approved in five hours of debate.
Public colleges seem likely to be the largest beneficiaries of the tax changes, and health care would reap some of the assistance.
Appropriations Committee Chairman Jim Fannin said he'll first seek to use the money to keep higher education from cuts. That would leave only about $100 million remaining to put toward a list of health care gaps that was estimated to top $260 million.
Shortfalls across other agencies wouldn't be filled.
"We're going to fully fund higher ed, and then we will use the rest of it and fund health care as far as it goes," said Fannin, R-Jonesboro, whose committee will craft its version of next year's budget Monday. "We're going to spend what we got, and the rest of it's going to have to be cuts."
After days of closed-door negotiations, bills approved by the House include a 32-cent cigarette tax hike; limits on the state solar tax credit; temporary suspension of a 1-cent sales tax exemption on business utilities; and a reduction on tax credits businesses can receive for paying local property taxes on inventory.
Expected to generate the most money was an across-the-board cut of 20 percent for most of the state's tax breaks.
That package of three bills by Rep. Katrina Jackson, D-Monroe, is estimated to drum up more than $300 million for the state treasury next year.
"It's definitely not enough, but it's more than what was in the governor's executive budget, so we've been able to reduce the cuts," said Ways and Means Committee Chairman Joel Robideaux, R-Lafayette, whose committee handles tax bills.
Other tax proposals were passed that aren't expected to provide new money for next year but could raise revenue in later years: a $200 million cap on the film tax credits Louisiana certifies each year and changes to an oil and gas tax break for horizontal drilling that would lessen the value of the tax exemption as oil and gas prices increase.
The measures go next to the Senate, where they are expected to run into resistance. They're short of the more than $1 billion that Senate leaders say is needed to plug holes in next year's budget, and they don't match Jindal's guidelines for what he'd support.
The Republican governor, who is building a likely presidential campaign, won't back anything he considers a net tax hike. Lawmakers have been trying to find loopholes to work within Jindal's rules, but the House plan is at odds with his guidelines.
Despite the divergence, Jindal didn't threaten vetoes Thursday, instead framing the House's decisions as part of a larger, ongoing budget debate.
"We commend the House on their hard work today. This is one more step in the process towards passing a balanced budget that helps protect higher education and health care without raising taxes," Jindal said in a statement.
Before the start of debate, House Speaker Chuck Kleckley, usually a Jindal ally, urged support of the proposals.
He said the list assembled by legislative leaders was "a smart approach," shaving down tax programs to prevent local universities from closing and keep health services from deep cuts.
"If you look at this list, nobody is getting hurt, but everybody is paying a share," said Kleckley, R-Lake Charles. He urged his colleagues before the start of the tax votes: "Let's do what's right today for the people of Louisiana."
Online: Louisiana Legislature: www.legis.la.gov
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Posted on Fri, May 8, 2015
by Melinda Deslatte, Associated Press