BATON ROUGE, La. (AP) — Louisiana lawmakers shouldn’t be creating new tax break programs less than a year after reaching a tax compromise that ended nearly a decade of budget instability, said Gov. John Bel Edwards, suggesting he’d jettison any pricey exemptions that might reach his desk.
“For the most part, it’s a conversation we should not be having,” the Democratic governor said Friday.
As they head into the fall election period, lawmakers in the House have backed a proposal to restore suspended sales tax holidays. Republicans and Democrats have suggested creating new tax exemptions for low-producing oil wells, rural job investments, certain health providers, diapers and feminine hygiene products. And some Republicans want to rework or remove the 0.45% state sales tax passed last year as the centerpiece of the seven-year tax compromise that stabilized state finances.
Price tags for the bills range from a few hundred thousand dollars a year to tens of millions of dollars annually.
Lawmakers argue the tax breaks encourage business growth, economic development projects or fairness in state tax laws. The Republicans pushing to undo the 0.45% sales tax — one such proposal is scheduled for a Monday hearing — say state surpluses show Louisiana doesn’t need the tax.
Edwards said the hard-fought tax deal struck with the majority-Republican Legislature after 10 legislative sessions since 2016 shouldn’t be upended with new carve-outs for favored groups. He noted that several government watchdog groups told him and lawmakers that “what we needed to focus on was reining in all of the tax expenditures, the giveaways, the incentives.”
“Here we finally achieved some level of stability, and the Legislature introduces a slew of new exemptions and so forth,” the governor said. “So I think, for the most part, these are things that we should not be considering at this point in time. And it is my intention to protect the state general fund and the budget.”
Edwards gave himself some wiggle room, however, declining to say he’d reject every tax break that could win final legislative passage.
“I’m obviously trying to leave myself just a little bit of flexibility,” he said. “But I will tell you there won’t be any high-dollar items in terms of new tax expenditures that will be approved.”