Analysis: Big decisions await governor, voters after session

BATON ROUGE, La. (AP) — Louisiana lawmakers wrangled their votes, worked out their deals and wrapped up their session. But they still have two hurdles to getting their most significant measures enacted: persuading the voters and surviving the governor’s veto pen.

One top tax priority for Republican Senate President Page Cortez and House Speaker Clay Schexnayder heads to Democratic Gov. John Bel Edwards’ desk while others go to an Oct. 9 election for voters to consider.

The complicated tax swap plan to disentangle Louisiana’s income taxes from federal tax collections and a bid to start the consolidation of sales tax collections were sent to the fall ballot. An effort to shift up to $300 million more annually in tax collections to roadwork and away from other government operations awaits a decision from Edwards, who sounded skeptical about the idea.

Hundreds of other bills were sent to the governor before the session shut down Thursday and await his bill review.

Voters who thought they might have a light election year without statewide or congressional positions up for grabs instead will face nine proposed constitutional amendments passed by lawmakers. The House and Senate created a statewide election specifically to get amendment decisions from the public, rather than wait for the 2022 election.

Voters will make decisions on property tax adjustments, levee districts’ taxing authority, state investments and allowable political activity by civil service workers. But most important to legislative leadership are sales and income tax proposals.

Lawmakers want to start the process for centralizing sales tax collections through a commission, rather than dozens of local government agencies. That’s a long sought goal of business organizations that argue the current system is too complicated and discouraging to companies. And that should be a fairly easy concept to explain to voters.

The income tax proposal is more complex because it’s a multi-bill package tied to the constitutional amendment. It would get rid of personal income tax and corporate tax deductions for federal income taxes paid in exchange for lowering the state’s overall income tax rates. Louisiana also would eliminate the corporate franchise tax for small businesses and lower the rate for others.

Schexnayder, a Gonzales Republican, noted that tax experts, economists and government watchdog groups had recommended the changes for decades.

“They said it couldn’t be done. It got done,” Schexnayder said.

But the ballot language doesn’t really incorporate all that — or even explain that the public would be voting to give away a tax break it currently receives. Instead, the proposal facing voters will read: “Do you support an amendment to lower the maximum allowable rate of individual income tax and to authorize the legislature to provide by law for a deduction for federal income taxes paid?”

Lawmakers and organizations backing the measure will need to do a strong sales job to voters if they want to ensure the long-sought tax swap idea can actually happen.

Meanwhile, Republican legislative leaders might need to make a full-court press to Edwards about their proposal to steer $300 million a year in the sales taxes charged on vehicle purchases to transportation projects. Those dollars would be stripped from the state general fund where they help pay for health care, education and other government operations.

Houma Rep. Tanner Magee, the House’s second-ranking Republican, described the measure as the state’s first sizable, continuing investment in infrastructure in decades. He said the bill’s passage marked a “really big day for Louisiana.”

But the Democratic governor and some outside groups worry about the impact on other services by reshuffling the money and the budget gaps that could be caused for future governors and lawmakers.

“I’m not yet ready to tell you whether this particular bill is one I’m willing to sign,” Edwards said.

Hoping to lessen opposition, backers of shifting the vehicle sales taxes to roadwork didn’t start the transfers until mid-2023, intend to phase it in over two years and added provisions to reduce the transfer to $150 million if Louisiana faces a sizable budget gap.

Still, the governor noted Louisiana has a 0.45% temporary state sales tax set to end in mid-2025, lessening tax collections by $400 million. In addition, he said consumer spending buoyed by federal coronavirus assistance has produced a short-term “bubble” in state tax collections and in federal Medicaid aid propping up the budget.

“There’s a lot to be taken into consideration, Edwards said.

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EDITOR’S NOTE: Melinda Deslatte has covered Louisiana politics for The Associated Press since 2000. Follow her at http://twitter.com/melindadeslatte.