Special Session Begins Debate Over How To Raise Revenue

Feb 21, 2018

Members of the House Ways and Means committee got right to work on Tuesday, looking at possible ways to increase revenue, as the state faces a budget shortfall. 

The Legislature had to address the same fiscal crisis two years ago.  Their solution then was to temporarily raise money by increasing the state sales tax from four percent to five percent. As of July 1, that fifth penny expires, causing the fiscal cliff.

Credit Wallis Watkins

Both Democrats and Republicans consider sales tax as part of the solution, but see things from a different angle.

Rep. Stephen Dwight, a Republican from Lake Charles, introduced a bill that would make part of that temporary sales tax increase permanent.

His plan involves "reducing the full penny that we made temporary and making a quarter penny permanent.”

That would make the state's sales tax 4.25 percent.

Democrats argue that an increase in sales tax is felt hardest by those with low income. Rep. Walt Leger, a Democrat from New Orleans, proposed expanding sales tax to include certain services — things like IT and telecommunications. Leger says if the state can apply sales tax to more industries, the rate can be lowered.

"We have, in fact, increased the rate over the last 18 months as a bridge to structural reform," he explained.

Taxing services is one of the recommendations made by a task force created in 2016 to find ways to stabilize the state's revenue. If the Legislature fails to find a way to raise money, they'll be forced to make cuts.

Leger warned he hasn't "talked to Legislators in this body that wish to make a billion dollars in cuts."

Ways and Means is expected to vote on the bills Wednesday.