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Louisiana sales tax phase-out advances, while gas tax stalls

BATON ROUGE, La. (AP) – Louisiana House Republicans pushed ahead Monday with a proposal to undo the seven-year sales tax passed last year to stabilize state finances, while elsewhere, efforts to boost the state’s gasoline tax and to centralize sales tax collections fizzled after meeting opposition.

The House Appropriations Committee voted 12-5 along partisan lines to advance GOP leader Lance Harris’ bill to phase out the 0.45% state sales tax over four years, eliminating it by mid-2023. Republicans backed advancing the measure to the House floor, while Democrats opposed the move.

Harris, of Alexandria, said two years of surpluses suggest Democratic Gov. John Bel Edwards and the majority-GOP Legislature passed more taxes and fees than are needed. He said some of those dollars should be returned to taxpayers.

“Let the families spend their money like they want to,” Harris said.

The bill isn’t expected to become law. Edwards opposes rolling back the sales tax any earlier than its mid-2025 expiration date, and the Senate tax committee has killed a separate proposal aimed at reworking the sales tax, with senators saying they don’t want to tweak last year’s hard-fought tax compromise. Even if the proposal never reaches the governor’s desk, Republicans are using it to criticize Edwards’ record on taxes in an election year where he faces two GOP challengers.

Edwards’ chief lawyer Matthew Block opposed Harris’ bill during committee debate Monday, saying the tax deal reached after seven special sessions ended a decade of budget uncertainty.

“It put us on a sound fiscal footing for the first time in a long time. It seems like there’s some amnesia” about the prior budget cut concerns, Block said.

Harris’ proposal would strip $87 million from state coffers starting on July 1, 2020. That figure would grow to $392 million by the fourth and final year of the phase-out.

Rep. Walt Leger, the House’s top-ranking Democrat, asked what Harris proposes to cut when the sales tax money starts disappearing. Harris replied that it was too soon to have such talks.

As the sales tax phase-out legislation advanced, two House Republicans stalled their own tax proposals in the House Ways and Means Committee amid significant opposition.

Rep. Steve Carter shelved his bid to raise the state gasoline tax to pay for road projects. Rep. Tanner Magee jettisoned his proposal that would start the centralization of sales tax collections, rather than having local officials do the work.

Carter, a Baton Rouge Republican, has sought for years to increase the gas tax to chip away at a $14 billion backlog of road and bridge projects. Business groups back the effort, but Carter acknowledged he couldn’t win support for the idea, particularly in an election year.

Magee, a Houma Republican, also faced heavy resistance from local elected officials across Louisiana, in his effort to start a process for centralizing sales tax collection work that currently is handled by parish officials. Several business organizations backed Magee’s proposal, describing Louisiana’s numerous sales tax collectors as cumbersome and out of step with other states. But organizations representing municipal government, police juries, school boards and sheriffs objected to the change.

“I understand maybe we’re not ready to go there yet,” Magee said before shelving his bill. “I’ll keep working on it.”

Associated Press

Associated Press

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