Gov. John Bel Edwards will make his case today for rewriting Louisiana’s tax laws to legislators returning for another session where debate will heavily focus on state finances, budget cuts and government spending levels.
Louisiana’s two-month regular session opens at noon, with little consensus emerging about how to remedy the cycles of unstable state finances, The Associated Press reports.
Edwards will lay out his proposals to the House and Senate an hour later, pushing a tax overhaul that aims to end the budget gaps by more heavily taxing businesses.
“The current tax and budgeting practices simply aren’t working for Louisiana and don’t provide a level playing field for both individuals and businesses,” Edwards said in a statement.
Republicans, particularly House GOP leaders, haven’t embraced the Democratic governor’s ideas. Rather than support a tax plan to raise more dollars for the state treasury, they’re suggesting reductions in state government spending—though without offering a roadmap so far of what programs they’d like to eliminate or what services they want to cut.
Edwards’ tax package is intended to replace $1.3 million in temporary taxes set to expire in mid-2018, while also raising another $400 million for next year’s budget that the governor wants to spend on the TOPS college tuition program, K-12 education and other items.
The proposals would continue the planned drop in state sales taxes from 5% to 4%, while charging the tax on new items like cable television as well as telephone and digital streaming services. Some tax breaks would be lessened or eliminated. Individual income tax rates would drop. The corporate franchise tax would be phased out.
Many parts of the package would require hefty, two-thirds votes from lawmakers, including the centerpiece proposal: a new tax on gross receipts called a Commercial Activity Tax, estimated to raise up to $900 million a year from businesses.
The legislative session must end by June 8.
