State Senate backs permanent higher sales tax rate to fund transportation projects 

The Louisiana Senate voted 27-10 Wednesday for a proposal that would make the state’s higher sales tax rate permanent but start shifting revenue from that tax toward transportation projects in 2025.

Sen. Rick Ward, R-Port Allen, attached the permanent sales tax proposal to a medical marijuana tax bill sponsored by House Speaker pro tem Tanner Magee, R-Houma, that came up for a vote on the Senate floor.

As previously written, HB514 only enacted a 4.45 percent sales tax on raw and crude medical marijuana. Ward’s amendment completely transformed the proposal from a medical marijuana tax to a sweeping sales tax extension meant to fund roads and bridges, according to Louisiana Illuminator.

Ward’s proposal—which received backing from Senate President Page Cortez, a Republican from Lafayette—would phase out a sales tax on large plant and manufacturing utilities that legislators added five years ago in order to balance the state’s budget. The business utility tax would eventually disappear in 2031 after a series of rate decreases stretched out over the next decade, according to his amendment.

Ward has also suggested that .45% of the state’s 4.45 percent sales tax be extended indefinitely. Currently, that .45% of sales tax is supposed to drop off entirely in 2025. 

Instead, Ward wants to make that .45 percent sales tax rate increase permanent and use that money to support road and bridge projects after 2025. Some of the specific projects that would be funded with this money include a brand new bridge over the Mississippi River in Baton Rouge as well as an Interstate 10 Calcasieu River Bridge replacement in Lake Charles, according to Ward’s amendment.

Ward says making the elevated sales tax permanent would be an alternative to raising the gas tax to fund road projects. Ward and a handful of other Baton Rouge lawmakers have tried to get a higher gas tax for transportation funding through the Legislature for years, but not enough Republicans have been willing to support it. That has restricted funding for new transportation projects in Louisiana, which are paid for almost entirely through that gas tax. 

On Wednesday, a mix of conservative anti-tax Republicans and Democrats voted against Ward’s proposal on the Senate floor. Sen. Karen Carter Peterson, D-New Orleans, questioned whether it was appropriate to stick such a sweeping tax overhaul into what was medical marijuana tax legislation. Read the full story.