As lawmakers approach a Feb. 19 special session to avert a $994 million “fiscal cliff” at the end of this fiscal year, Gov. John Bel Edwards said today he’s making progress with House leaders on a budget compromise.
“There is agreement on the vast majority of that $994 million,” Edwards said. “There’s a good faith effort to fashion a compromise and do it on a permanent basis.”
Edwards and lawmakers are still negotiating on how to fix the budget hole, created by expiring tax hikes passed two years ago that fall off the books June 30. Eliminating sales tax breaks and temporarily extending part of the fifth penny of sales tax have been floated as tax measures palatable to the Republican-led House, where much of the disagreement between the Legislature and Governor stems.
Most of the tax measures on the table, said Edwards, come from a task force that offered a host of recommendations on improving the tax code and stabilizing the budget.
Richard Carbo, a spokesman for Edwards, added the governor and lawmakers—after a productive meeting Friday—are “not far off” on reaching an agreement that covers the full shortfall, but specific amounts are not yet available on how much is left to fill.
House Speaker Taylor Barras and House GOP leader Lance Harris did not respond to requests for comment this afternoon.
Barry Erwin, president and CEO of Council for a Better Louisiana, told the Press Club of Baton Rouge today he’s “somewhat optimistic” lawmakers will avert the cliff during the special session starting next week. But he cautions solutions will probably not come in the form of permanent tax reform. Instead, he expects lawmakers to pass a combination of permanent and temporary tax hikes, along with some budget cuts.
“What I don’t expect to see if a lot of reform,” Erwin said.
Erwin, who sat on the task force that issued recommendations on the tax code and budget, said the Legislature should reduce the gap between the high sales tax and low income tax collections in Louisiana. He added the state squanders the positives of having a low tax burden because of how convoluted the tax code is.
“I just don’t think it behooves us to have the highest state and local sales tax burden in the country,” Erwin said.