The Senate is now working on the House-approved bills for alleviating the fiscal crisis – and in the case of the penny sales tax measure, the Senate is re-working it.
“It is purposefully useless,” Chairman J.P. Morrell said, as he asked his Revenue and Fiscal Affairs Committee to amend the bill, making the tax last five years, instead of 18 months.
Department of Revenue secretary Kimberly Robinson helped explain why the House-approved time limit is impractical.
“In terms of the 18 months, this falls under the definition of ‘non-recurring revenue’ for purposes of the Revenue Estimating Conference,” Robinson stated.
“With an 18-month expiration date, by definition, there is no question that this would be one-time money?” Morrell asked.
“That is correct,” Robinson replied, adding, “I think the House’s definition of recurring is three years.”
“So if we left this bill at 18 months, in the posture the House sent it to us, would have us using one-time revenue for two future budgets – to balance the budget, essentially,” Morrell confirmed.
As fiscal experts have said, over-reliance on one-time money for budget balancing has led to the current crisis, with more than $800-million in one-time revenue used in the current year, adding to the hole that must be filled in the next budget.
“This was the agreement of the House, and of course I don’t want to go against the agreement of the House,” Representative Katrina Jackson, author of the penny sales tax bill, said of the amendment Morrell was requesting. She then went on to talk about the 18-month sunset, which was an amendment added on the House floor last week.
“I did talk to staff after putting the amendment on, and they’re saying it cannot be used for higher education or any of the other issues that we currently face.”
“It really can’t be used for anything,” Morrell interjected.
“I think the House knew that when they offered this amendment,” Jackson said.
Governor John Bel Edwards told the press Friday that the 18-month cap was “unrealistic”, and said he hoped the Senate would fix it. The Governor also spoke then about the House’s apparent desire to just resolve the current budget crisis with what they do in this special session.
Morrell indicated that the Senate is taking the longer view, looking at this bill to help more than just the current problems.
“If we’re going to take up and address significant tax reform, there has to be bridge funding to do that reform.”