Senate Committee Rejects First Proposal To Alter Temporary Sales Tax
Facing a steep drop in state revenue last year, the Louisiana Legislature agreed to partially extend the state sales tax by .45% until 2025. But as the state’s finances have moved from deficit to surplus, some Republican lawmakers are reconsidering the temporary tax.
Senator Barrow Peacock (R-Bossier City) introduced a bill Monday in the Senate Revenue and Fiscal Affairs committee that would slowly redirect the .45% temporary sales tax extension to transportation projects and away from the state general fund, which covers general operating expenses for the government.
“This will allow our state to not be as dependent on those funds in the general fund," explained Senator Peacock, "and slowly move that money towards the transportation trust fund, which we all know we need to invest in roads and bridges.”
Department of Revenue Secretary Kimberly Robinson agrees the state should find ways to fund road and bridge projects, but she opposed doing it this way.
“To move money out of the general fund when there are so many critical needs in the general fund is just not something we can be in support of at this time,” said Robinson, a member of Governor John Bel Edwards' administration.
Senator Gerald Boudreaux (D-Lafayette) opposed the bill as well, saying the Legislature fought tooth-and-nail last year to reach a compromise and avoid massive cuts to higher education and health care.
“If everybody just starts coming up with ideas as to how we spend money that we just fixed less than a year ago, we’d be right back in another fiscal cliff,” Boudreaux said.
The committee agreed, rejecting the bill along party lines.
Peacock's bill was the first test the sales tax faced this session, but it’s not the last. Three other bills propose either rolling back the temporary sales tax entirely, or gradually over time. Each would have to come before the Democrat-controlled Revenue and Fiscal Affairs committee.
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