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Two Tax Bills To Resolve Budget Deficit Head To House Floor

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Two tax bills that will help the state overcome a looming one billion dollar budget deficit are heading to the House floor. Some Republicans were seeking to make permanent a quarter of a temporary one-cent sales tax. But Shreveport Representative Alan Seabaugh didn’t like the permanent part, so he changed the legislation so a quarter of the temporary one-cent sales tax stays until mid-2021.

 

Seabaugh says that the State would need about two more years before it "permanently sticks its hands into businesses' pockets."

 

If this legislation becomes law, the state’s sales tax rate would be a four and a quarter percent until June 30, 2021. It’s currently 5-percent, but two years ago, the sales tax rate was four-percent. The measure also temporarily eliminates some sales tax breaks. Baton Rouge Representative Barry Ivey opposed it.

 

Ivey says that this would make Louisiana less attractive for businesses. 

 

For Democrats to support the sales tax bill, they wanted the House Ways and Means Committee to remove tax breaks for middle and upper income wage earners who itemize deductions on tax returns. The panel did on a 10-7 vote. New Orleans Representative Walt Leger says these tax bills can stave off deep budget cuts.

 

Leger says that the tax bills would save crucial programs like TOPS and "stable funding for higher education."

 

The bills now head to the House floor, where they’ll need 70 votes. Ivey says the measures do not provide the real tax reform.

 

Ivey says that "it's a very sad day in Louisiana" because legislators have had two years to resolve the budget crisis.