Nearing state shortfall, Gov. Edwards pitches tax changes

BATON ROUGE, La. (LOCAL 33) (FOX 44) - As Louisiana risks a budget gap of nearly $1 billion by summer, Gov. John Bel Edwards is asking state legislators to revisit recommendations that a nonpartisan task force crafted last year.

The governor, meeting dozens of business leaders Monday at Louisiana State University, outlined a series of proposed changes to the state's tax code. The suggestions included:

  • Eliminating the fifth penny of state sales tax. Lawmakers had enacted the extra cent last year, to give the state an additional $900 million in yearly revenue. But the governor did say he would allow a short-term renewal of the tax, so long as legislators approve other revenue streams.
  • Removing more than 180 sales tax breaks.
  • Expanding the sales tax base to include debt collection, data processing and insurance services, as well as cable, satellite and streaming services.
  • Compressing state income brackets and reducing itemized deduction to 50 percent.
  • Taxing business utilities at 4 percent and industrial utilities at 2 percent.

The Republican-led state House panned similar proposals earlier this year. Edwards, a Democrat, hopes the conservative majority will reconsider. Failure to account for $994 million in funds by June 30, the governor warns, would see major cuts to state healthcare, education and infrastructure.

"Sometimes lawmakers move because the sense of urgency is greater," he said.

Since the state constitution bars legislators from addressing tax policy during regular sessions in even-numbered years, lawmakers can only consider Edwards' proposals before March.

"I think it's important that we move forward with a special session in February," he said. "I would love to call it. I'm not going to call one if there is not broad agreement between me and legislative leadership on a specific plan to move forward."

The governor added that next month, he will submit two executive budgets: one with his tax recommendations and a second with nearly a billion dollars in budget cuts.

"It's not a purely academic exercise," he said. "We have already come to an agreement as to how we would do it, because I think it would serve to underscore the need to go ahead and get it done."

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