When House Bill 61 went in front of the Senate Revenue and Fiscal Affairs Committee Tuesday morning, it proposed cleaning one of the four pennies of state sales tax from exemptions, generating $112 million in revenue next fiscal year.
Committee Chairman Senator JP Morrell, D-New Orleans, looked around at the packed room, noting “this is the first time industry has showed up, and you’ve showed up because it’s a bill that negatively affects you."
Morrell is referring to the Louisiana Association of Business and Industry. LABI President Stephen Waguespack spoke in opposition of the bill, but “the business community wants to do their part to help this body solve what we all know is a real challenge,” he says.
Senator Karen Carter Peterson, D-New Orleans, acknowledging that spirit of cooperation, asked if business doesn’t support HB 61, what does it suggest is a fair way to raise revenue? “We have 48 hours. What should be taxed?” she asked.
The business industry has suggested raising the sales tax even higher than the one penny recommended by the Governor, a suggestion the largely Democratic Committee took issue with because it is a regressive tax, meaning it would hit lower-income individuals harder, says Senator Troy Carter, D-New Orleans. “Today, I hear 'raise another penny, let’s put it on the backs of poor people.' Poor people and working class people in Louisiana have skin in the game. All we’re asking is that everybody come with skin in the game,” he explains.
Chairman Morrell alluded to the influence business continues to have on the special session. “The Legislature came in with the intention of raising one penny. This idea of raising more than one penny did not originate in the Louisiana Legislature, period,” he says.
Illustrating their frustration, rather than removing tax exemptions from just one percent of state sales tax, the Committee added an amendment cleaning all four pennies, further increasing the amount businesses could have to pay.
The amendment was adopted without objection and reported favorably to the Senate. The bill’s next stop is the Senate floor.