Louisiana House Reaches Tax Deal, Sending Bill To The Senate

Jun 22, 2018

Lawmakers in Louisiana’s House reached a bipartisan compromise Friday, ending a months-long stalemate over taxes. The House narrowly approved setting the state sales tax rate at 4.45% starting July 1. That rate would stay in place for 7 years - until 2025.

The plan would raise over $460 million next fiscal year. It’s still around $40 million short of filling the entire budget gap, but TOPS, higher education and Go grants would be fully funded. Both Republicans and Democrats say avoiding cuts to the scholarship program and the state’s universities were key to brokering a deal.

At a press conference Friday, Governor John Bel Edwards said the Legislature made “tremendous progress in stabilizing our finances” by successfully passing the tax measure over to the Senate.

Just one day earlier, lawmakers failed to agree on any revenue measures and spent much of the day at an impasse, leaving the success of this special session in question. Thursday night, Speaker of the House Taylor Barras (R-New Iberia) said the House was in “an extreme deadlock” over whether to renew .4% or .5% of the one penny.

One penny in state sales tax expires at the end of the month, leaving the state with a budget deficit. For months, lawmakers have been trying to reach a deal to keep part of that penny in place, in order to avoid major cuts to state services.

Lawmakers will be at work this weekend, when the Senate Finance Committee meets to review adjustments to the budget. The Revenue and Fiscal Affairs Committee will also meet Saturday morning to debate the tax bill. Both measures will still need full approval by the Senate. The special session must end no later than Wednesday.