Louisiana sales tax phase-out advances, while gas tax stalls

The House Appropriations Committee voted 12-5 along partisan lines to advance GOP leader Lance Harris' bill to phase out the 0.45% state sales tax over four years, eliminating it by mid-2023. Republicans backed advancing the measure to the House floor, while Democrats opposed the move.

Harris, of Alexandria, said two years of surpluses suggest Democratic Gov. John Bel Edwards and the majority-GOP Legislature passed more taxes and fees than are needed. He said some of those dollars should be returned to taxpayers.

"Let the families spend their money like they want to," Harris said.

The bill isn't expected to become law. Edwards opposes rolling back the sales tax any earlier than its mid-2025 expiration date, and the Senate tax committee has killed a separate proposal aimed at reworking the sales tax, with senators saying they don't want to tweak last year's hard-fought tax compromise. Even if the proposal never reaches the governor's desk, Republicans are using it to criticize Edwards' record on taxes in an election year where he faces two GOP challengers.

Edwards' chief lawyer Matthew Block opposed Harris' bill during committee debate Monday, saying the tax deal reached after seven special sessions ended a decade of budget uncertainty.

"It put us on a sound fiscal footing for the first time in a long time. It seems like there's some amnesia" about the prior budget cut concerns, Block said.

Harris' proposal would strip $87 million from state coffers starting on July 1, 2020. That figure would grow to $392 million by the fourth and final year of the phase-out.

Rep. Walt Leger, the House's top-ranking Democrat, asked what Harris proposes to cut when the sales tax money starts disappearing. Harris replied that it was too soon to have such talks.

As the sales tax phase-out legislation advanced, two House Republicans stalled their own tax proposals in the House Ways and Means Committee amid significant opposition.

Rep. Steve Carter shelved his bid to raise the state gasoline tax to pay for road projects. Rep. Tanner Magee jettisoned his proposal that would start the centralization of sales tax collections, rather than having local officials do the work.

Carter, a Baton Rouge Republican, has sought for years to increase the gas tax to chip away at a $14 billion backlog of road and bridge projects. Business groups back the effort, but Carter acknowledged he couldn't win support for the idea, particularly in an election year.

According to this story from Louisiana Radio Network, Baton Rouge Representative Steve Carter is to request the winner of the fall gubernatorial election call a special “infrastructure” session next year.

Carter says crumbling roads and bridges are some of the biggest threat facing the state.

“This should be the number one campaign issue, give the next year’s members the opportunity to do something of real significance, something that they can be proud of, because it effects every one of us.”

Carter’s plan would have raised the gas tax six cents in the first year, and up to 18 cents over the next 12 years.

But Crowley Representative John Stefanski says support for any additional taxes will remain tepid until the state government proves it can do a better job managing it’s money.

“I polled this issue, and overwhelmingly it comes back negative against a new gas tax, and it think we have to move forward with reform before we can build the confidence with our constituents to be able to get a new tax.”

Carter says there just wasn’t enough time left in the session to push the bill through the House and Senate.

Carter was visibly frustrated at many of his colleague’s refusal to back the 300-million-dollar proposal, saying it’s not right for the Legislature to keep kicking the can down the road.

“We came here to have to courage, we came here to be bold, and we’ve waited 30 years to be bold.”

Magee, a Houma Republican, also faced heavy resistance from local elected officials across Louisiana, in his effort to start a process for centralizing sales tax collection work that currently is handled by parish officials. Several business organizations backed Magee's proposal, describing Louisiana's numerous sales tax collectors as cumbersome and out of step with other states. But organizations representing municipal government, police juries, school boards and sheriffs objected to the change.

"I understand maybe we're not ready to go there yet," Magee said before shelving his bill. "I'll keep working on it."