The Louisiana House backed a proposal Thursday to begin rolling back the temporary sales tax extension that was the solution to last year’s budget deficit. That compromise took several special sessions to reach.
The bill is being pushed by Representative Lance Harris (R-Alexandria), leader of the House GOP.
The .45 percent tax is meant to last until 2025, but under this legislation, it would start decreasing next year until it rolls off completely in 2023.
“All I’m asking is give the taxpayers some relief,” Representative Harris told members of the House.
The state ended last year with a budget surplus over $300 million. Harris says that’s reason enough to begin rolling back the tax.
“It’s time, if we’re looking at excesses, to return some of that money back to your constituents,” he said.
But the surplus isn’t the result of more sales tax dollars; it’s the corporate and personal income tax collections that were higher than expected.
Last year, Democrats opposed fixing a massive budget deficit by relying on sales taxes, which are more burdensome on low-income families. Eventually lawmakers settled on the .45 percent extension.
Democratic Representative Sam Jenkins (D-Shreveport) said that was a hard vote, but it was a compromise, "because we wanted to bring some stability to the budget.”
Now, Democrats oppose rolling back the tax, because the state would lose $87 million in the first year.
Democratic Representative Walt Leger (New Orleans) amended Harris’ bill dedicating a portion of the tax—worth more than $40 million—to early childhood education, a program lawmakers have been clamoring to fund all session.
"I don't support what Representative Harris is trying to do," explained Leger, "but I see it as a vehicle to potentially accomplish something that is transformative for the state of Louisiana.”
The bill now moves to the Senate, where an effort to alter the sales tax extension has already been rejected in committee.
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