Two tax bills that will help the state overcome a looming one billion dollar budget deficit are heading to the House floor. Some Republicans were seeking to make permanent a quarter of a temporary one-cent sales tax. But Shreveport Representative Alan Seabaugh didn't like the permanent part. He amended the legislation, so a quarter of the temporary one-cent sales tax stays until mid-2021.
"Give us a couple more years to see if we can fix the problem, before we permanently stick our hand this much deeper into businesses' pocket," Seabaugh said.
If this legislation becomes law, Louisiana taxpayers would pay a four and a quarter percent sales tax until June 30, 2021. They currently pay 5-percent, but two years ago, the sales tax rate was four-percent. The measure also temporarily eliminate some sales tax breaks. Baton Rouge Representative Barry Ivey voted no.
"It doesn't really address make Louisiana more attractive for business, it actually does the opposite, in my opinion," Ivey said.
For Democrats to support the sales tax bill, they wanted the House Ways and Means Committee to remove tax breaks for middle and upper income wage earners who itemize deductions on tax returns. The panel did on a 10-7 vote. New Orleans Representative Walt Leger says these tax bills will help avoid deep budget cuts.
"We can provide the sorts of services that the people have asked for, especially programs like TOPS but probably most importantly stable funding for higher education," Leger said.
The bills now head to the House floor, where they'll need 70 votes. Ivey says the measures do not provide real tax reform.
"We've had two years and this is the best that we can come up with...it's a very sad day in Louisiana," Ivey said.
The special session must end March 7th.