BATON ROUGE, La. — With most of his tax agenda in tatters, Gov. John Bel Edwards said Wednesday that it’s becoming more likely he’ll call a special session over the next year to deal with a mid-2018 budget hole that state lawmakers have done little to patch.
“Time is closing out on us, and quite frankly. I’m disappointed with how far behind the Legislature is,” Edwards said on his monthly radio call-in show.
Louisiana faces a more than $1 billion budget shortfall that hits in July 2018, when temporary sales taxes passed by lawmakers expire. Edwards wants lawmakers to pass a variety of tax measures to close the gap, known in the Louisiana Capitol as the “fiscal cliff.”
Most tax bills must start in the House, and no large revenue-raising tax bills have received backing there so far amid strong anti-tax sentiment in the majority-Republican chamber.
While three weeks remain in the legislative session, Edwards acknowledged the dismal outlook for tax bills. A day before Edwards’ comments on the radio, the House overwhelmingly rejected the first significant proposal to come up for a vote that would raise money to fill the looming shortfall, a bill to permanently scrap millions of dollars in sales tax breaks.
“Every day it looks more and more likely that we’ll have to have a special session,” the governor said.
The current legislative session that must end by June 8 is the last regular session in which taxes can be considered before the 2018 drop-off in revenue.
Louisiana has been struggling with its finances for nearly a decade. When he took office in January 2016, Edwards inherited a hefty deficit. He’s called three special sessions since his inauguration, all of them focused on rebalancing the state’s budget, both through taxes and cuts.
Most of the taxes passed during those special sessions to fill holes were the temporary sales tax increases that are expiring next year.
This session, Edwards sought a significant rewrite of Louisiana’s tax laws that would shift more of the tax burden to business. The governor said the changes would stabilize the budget while also promoting fairness in how taxes are paid by people and companies.
But his central business tax was shelved amid widespread opposition, and Edwards couldn’t gain traction for the rest of the tax package from House GOP leaders.
House Republicans pared back spending in the budget proposal for the upcoming financial year in the hopes that cutting government now would lessen the mid-2018 gap. With that action, they believe the shortfall, estimated to be as much as $1.3 billion, could be cut in half.
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