With just one week left before lawmakers adjourn, the looming question in the Capitol is whether the House and the Senate will come to an agreement on a budget for the fiscal year that begins July 1. The House decided to cut $235 million from the governor’s budget proposal and the Senate is expected to restore most – if not all – of that funding in its own version of the budget. The two chambers would have to reconcile the differences before sine die on June 8 to avoid a special session. Showing a lack of confidence in their ability to reach agreement, Gov. John Bel Edwards has preemptively called for a special session. The Advocate’s Elizabeth Crisp:
“Given the significant disagreements on the state’s operating budget, I am issuing this call as a precautionary measure,” [Gov.] Edwards said in a statement Wednesday afternoon. “Should we come to an agreement on the operating and construction budgets, this special session will not be necessary. The special session will begin 30 minutes after the regular session ends. It must end June 19 or earlier. Lawmakers can only take up items within Edwards’ special session call. He has limited it to the state’s operating budget and construction spending. Another special session, dealing with the state’s finances when a temporary sales tax hike ends next year will likely come before the next regular session begins in March 2018.
Tax swap bills advance
Two bills that would establish flat individual and corporate income tax rates in exchange for the elimination of the federal income tax deduction narrowly passed the House yesterday. While this “tax swap” is not expected to raise significant revenue for the state, it would result in higher income Louisianans paying slightly more in income taxes while lower income residents would pay less. Tyler Bridges with The Advocate has the story:
House Bill 359 would establish a flat 3.95 percent rate for individuals coupled with their no longer being allowed to deduct federal tax payments on their state tax returns. House Bill 360 would establish a flat 6.5 percent income tax rate for corporations coupled with their losing the federal tax deduction. The flat rates would replace the current graduated income tax rates. Both bills now go to the Senate, which also has before it House-passed legislation to put the individual income tax measure on the ballot. State Rep. Julie Stokes, who orchestrated the approval of both measures Wednesday, said the plan is for the Senate to combine the flat tax bills into a single measure that would go before voters in October.
A new blog by LBP’s Nick Albares looks at the bills’ impact on various income groups, and makes clear that they would do nothing to solve the $1.3 billion fiscal cliff that looms in the 2018-19 fiscal year as temporary taxes expire.
In fact, passage of these bills – which would require a vote of the people – would make it harder for policymakers to solve the state’s structural revenue shortfall in a future special session.
Healthcare questions swirl at town hall
U.S. Sen. Bill Cassidy was one of only two Republican senators to hold a town hall during the Memorial Day recess. At his forum in Covington yesterday, a packed audience grilled the senator about proposed changes to the nation’s health care system. Cassidy avoided discussing his position on the House-passed American Health Care Act and stuck to promoting his own proposal, the Patient Freedom Act, which has gained little traction in Congress to date. Members of the audience insisted that regardless of a specific bill, Cassidy should commit to upholding certain principles in the health care debate. Politico’s Jennifer Haberkorn was there:
Those in the room, who wrote questions on note cards beforehand, demanded that Cassidy commit to voting for a plan that covers the uninsured, preserves birth control coverage and provides health care coverage — not just access. Cassidy, a gastroenterologist who spent much of his career working in Louisiana’s charity hospital system, leaned heavily on his medical background to rebut criticisms that a Republican plan that does away with the Affordable Care Act’s insurance mandates would result in weak coverage. When a fellow physician in the crowd asked Cassidy to live up to the Hippocratic Oath, which begins with “do no harm,” the first-term senator said the Affordable Care Act is unaffordable for patients and taxpayers.
Meanwhile, the Kaiser Family Foundation released new polling data showing the public’s fairly dismal opinion of the American Health Care Act:
Three-fourths (76 percent) of the public thinks the health care plan recently passed by the House does not fulfill most of the promises President Trump has made about health care while 14 percent say it fulfills most or all of his promises. This viewpoint is shared regardless of party identification with majorities of Democrats (86 percent), independents (79 percent), and Republicans (59 percent) saying the AHCA fulfills some or none of the promises President Trump has made about health care. In fact, more of the public is favorable in their overall views of the ACA than in their views of the Republican plan to replace the 2010 health care law. About half of Americans have a favorable view of the ACA compared to about three in ten who have a favorable view of the new Republican plan.
Gas tax bill shelved amid tense debate
Louisiana’s gas tax hasn’t been increased since 1990 and the state has a $13 billion backlog of infrastructure projects. That backlog and unprecedented levels of traffic congestion in Baton Rouge led Rep. Steve Carter of Baton Rouge to propose a 17-cent per gallon increase in the gas tax. That proposal stalled yesterday in the House, as Carter announced he was 10 votes short of the necessary two-thirds majority, despite support from business groups, transportation experts, and the governor. The AP’s Melinda Deslatte has more:
Before he shelved the measure, [Rep. Steve] Carter chastised Republican Party leaders, saying he was “shocked and disappointed” the party’s governing body narrowly passed a resolution urging lawmakers to reject the tax bill. He criticized Americans for Prosperity as “an out-of-touch, out-of-state bankrolled group” that he said spread misinformation about the tax. Rep. Kenny Havard, the Republican chairman of the House transportation committee, said outside influences have too much sway. “I think we’re losing our way. We’re forgetting about the people who sent us here,” he said.
Number of the Day
$1.1 billion – the reduction in federal funding for adult job training programs in President Trump’s FY 18 budget, a decrease of 40 percent from current funding levels. (Source: Center on Budget and Policy Priorities)