Only in Louisiana could a set of budget shortfalls totaling some $2.9 billion be solved with a single penny. Or at least that’s one path to a solution Gov. John Bel Edwards is advocating, Jeremy Alford writes in his latest column.
“That it costs the federal government 1.67 cents now to make a 1-cent piece is somewhat fitting given the curious political environment ensnaring the Capitol these days,” Alford says. “But the governor wants more than just one penny.”
The governor wants to add 1 cent to the state’s 4-cent sales tax to generate millions upon millions of dollars each year. Alford calls it a quick and easy way for a broke Louisiana to bring in some cash. The state needs it to fill a $940 million hole by June 30 and a more than $2 billion budget shortfall in the fiscal year beginning July 1, he notes.
“With roughly two weeks, give or take, remaining in the special session, it has all come down to the penny,” Alford writes. “The governor has a tremendous amount of political capital wrapped up in his proposal and without its passage his deficit elimination plan will get somewhat sticky and this special session could end in failure.”
The stakes aren’t just high for the governor, Alford writes. Lawmakers also don’t want to go home without some closure before the regular session convenes March 14.
“While the penny proposal would generate serious money and is certainly the most important policy element of the special session, the 1-cent addition alone won’t do the trick,” Alford says. “It would raise just $220 million during the remainder of this fiscal year and $910 million for the next. Lawmakers will need to advance at least one other bill.”
Alford says this places a lot of pressure on the House of Representatives, since it is the only chamber where tax bills can originate.
“There’s no telling what that other bill or bills might be, but the chatter always seems to steer back to the state’s four-penny sales tax,” he says.
Jeremy Alford publishes LaPolitics Weekly, a newsletter on Louisiana politics, at LaPolitics.com. Follow him on Twitter, or on Facebook. He can be reached at JJA@LaPolitics.com.
