LETTERS TO THE EDITOR
February 25, 2016
PLAYER OF THE WEEK
March 3, 2016
Still more than $200 million short of filling this year’s budget gap and with less than two weeks to go before their special session ends, state lawmakers are already talking about the possibility of an additional special session to clean up Louisiana’s financial mess.
The current “extraordinary” session must close March 9. Lawmakers will return March 14 for a regular session that would end in June.
The new session buzz comes during a week that has seen progress in passage of revenue enhancing laws and a slower movement toward actual budget cuts. Specifically, the question of when a second special section will occur is still open and unanswered.
“If we can’t raise enough revenue, we are going to have to carry that deficit into the next fiscal year, and you have to pay down that deficit first,” said Rep. Jerome Zeringue, R-Houma. “If that happens, we are going to have to have another special session to address it.”
Rep. Beryl Amedee, R-Houma, agrees.
“I am 97 percent sure we will have a special session,” Amedee said. “We are not even done dealing with this year’s shortfall.”
Lawmakers said the most likely scenario is a close-out of the current session March 9, followed by the near-immediate opening of the regular session March 14, with an early adjournment so that a special session can be held.
“The only way another special session could be plausible is if you end the regular session a couple of weeks in advance,” Zeringue said.
A two-thirds majority vote would be required for the second special session call. Legislators would be loath to take the action if not absolutely necessary, for two reasons.
Many have their own private businesses that need attention, and the cost for each legislative session in terms of per-diem payments for expenses as well as operation of the House and Senate just adds to the state’s woes.
This week all eyes have been on the state Senate, which has the task of rejecting, amending or passing what the House has already taken up. One of the most closely watched provisions is the sales tax increase, 1 penny on each dollar, which the House passed with an 18-month sunset provision. Lawmakers say that sunset likely won’t withstand Senate scrutiny because the period is not long enough for the state budget to see the effects of what change it creates.
It is more likely, local legislators agree, that the sunset will not occur for three to five years.
Amedee, along with Rep. Dee Richard, Independent-Thibodaux, voted against the sales tax boost.
“It is a direct tax increase and I am opposed to tax increases as much as possible,” Amedee explained. “I knew it was going to because we don’t have enough to cut enough to not have a tax increase. But I couldn’t come home where me people are about to not have a job next month and tell them I increased their sales taxes.”
In addition to the penny sales tax, lawmakers were scheduled this week to address proposed increases to taxes on tobacco and alcohol.
Rep. Truck Gisclair, D-Larose, was among local delegation members who voted for the sales tax increase.
“I didn’t want to pass a tax but this hole is so deep,” Gisclair said. “We were left with no choice.”
Zeringue said with regret that even with cutting measures that have been taken, or may soon be taken, the state will still be short.
“It is sort of frustrating, speaking with fellow legislators who haven’t voted for taxes and think we can cut our way out of it,” Zeringue said. “We can do it, but if we do we are closing emergency rooms, shutting down Nicholls State University and other institutions of higher education. We have members of our delegation who didn’t vote for taxes and saying we can cut. I defy them to tell me or show me where or what they would cut.”
Even cutting state contracts – an approach Richard in particular has advocated – is not any kind of a panacea, according to Zeringue. He notes that only $200 million worth of contracts are specific to the state general fund, and that a majority of contracts the state holds with private entities are paid with federal dollars.
“We are looking at additional cuts,” he said. “But the most conservative member, Rep. Cameron Henry, has said we can not cut our way out of this problem.”
One dreaded move that lawmakers have been able to avoid so far is elimination of the state credit on vessels, which is a major issue for coastal parishes like Terrebonne and Lafourche. A state inventory tax paid to parish treasuries includes movables like commercial boats, ships and rigs. Business owners get to deduct the tax they pay into the parish treasuries for this from their state tax returns.
Parish leaders have complained that elimination of the credit for vessels will result in an exodus from Louisiana, to ports where inventory taxes are not charged.
But Zeringue says that leaves owners of businesses whose inventories remain taxable but with no credits – auto dealerships and smaller stores – are left to hold up the burden. That, Zeringue maintains, is not fair.
State Rep. Tanner Magee R-Houma said he is hoping the senate will come up with solutions this week as they examine bills up for their review.
“We have to see what the senate does, maybe they will find another $200 million,” Magee said. “There is no appetite for any other taxes.”
Among potential remaining fixes is a reinstatement of the business utility tax. When natural gas prices were high it was eliminated.
“Now natural gas is dirt cheap,” Magee said. “That may realize some revenue and I am not against it.” •
