Gov. John Bel Edwards outlined his tax proposals today for closing a $1 billion budget gap, offering a list that will form the basis of negotiations with House Republicans who have previously blocked many of his tax ideas.
The Democratic governor is taking a different approach from earlier this year when he directed much of his unsuccessful tax package focus on corporate taxpayers.
The latest recommendations, largely modeled on the suggestions from a nonpartisan study group created by lawmakers, would raise taxes on certain businesses and some middle- and upper-earning taxpayers. The governor said the recommendations would create a more balanced tax policy that would stabilize state finances and offer predictable, long-term revenue streams to pay for government expenses—doing away with temporary taxes in place for the past two years and what he called the “yo-yo effect” of constant budget crises.
Edwards said he does not support renewing a 1% temporary sales tax enacted in 2016 that is set to expire on June 30, causing much of the budget gap that is on the horizon. That tax was criticized as disproportionately hitting the poor.
But Edwards does support continuing reductions made in 2015 to tax-break programs that largely assist businesses. He also wants to continue to charge businesses higher sales taxes for utilities; begin charging sales taxes on some services such as cable television; increase the individual income tax for those who itemize on their personal income-tax forms; and change the brackets for calculating individual income tax, which would boost taxes on middle- and upper-income earners.
None of the ideas are new. Variations on the proposals have been debated over the past two years as Edwards and lawmakers have continued to struggle through repeated financial problems. House Republicans have blocked several of the proposals in previous legislative sessions, particularly objecting to anything that involved personal income tax laws.
Passing any tax plans will require a special legislative session. Edwards said he would call a February special session if he could reach a consensus with House GOP leaders.
“I think it’s important we move forward with a special session,” he said. “But I’m not going to call a special session just for the sake of calling one.”
