A ‘fiscal’ session looms

A ‘fiscal’ session looms

The 2021 legislative session is still a little more than three months away, but the political debates that will engulf the Capitol are already taking shape. The Covid-19 pandemic has caused state tax collections to crater, complicating the state’s efforts to maintain a balanced budget while funding critical services. But some legislators are already proposing to make the problem worse by instituting new tax breaks, which would only make it harder to invest in education, workforce training and safety-net programs that help level the playing field and drive our economy forward. The AP’s Melinda Deslatte previews what lies ahead. 

Three years after Louisiana lawmakers and Edwards struck a budget-balancing tax deal, the Legislature appears ready to return to the tax battles. Some Republicans are pushing a full scale redesign of Louisiana’s tax laws. Other lawmakers want to tweak the myriad of tax breaks on the books. And one GOP legislator intends to revisit the discussion of whether to raise Louisiana’s stagnant gas tax to address a multibillion-dollar backlog of road and bridge work. Edwards hasn’t said if he’s interested in a tax debate, and such efforts are always difficult because of the two-thirds votes required to pass major provisions.

What Georgia means 
Democrats appear poised to control the U.S. Senate after Raphael Warnock defeated Sen. Kelly Loeffler, while Jon Ossoff leads over incumbent David Perdue. The turnover in the upper chamber will affect everything from President-elect Joe Biden’s ability to have his cabinet picks confirmed, to the legislation that gets to his desk. It means Democrats could pass spending and tax increases with just a simple majority via a process called reconciliation. But as NPR’s Deirdre Walsh and Kelsey Snell explain, it doesn’t give Biden a blank check: 

The ambitious proposals addressing climate change and health care and other domestic priorities touted by Biden and Harris would be difficult, if impossible, to advance with more moderate Democrats — especially those facing competitive 2022 midterm reelection campaigns — reluctant to sign onto partisan proposals. The much smaller than anticipated House Democratic majority compounds the challenge for the party. Instead, Biden would need to consider which domestic priorities can get bipartisan support since Senate rules now require anything to get 60 votes to advance. The president-elect has already indicated that additional coronavirus relief will be his first priority, but he has also said he plans to unveil an infrastructure plan that could get support from Republicans.

First up: a new round of Covid-19 relief. Democrats favor $2,000 stimulus checks for individuals and much-needed aid for state and local governments that are facing huge budget deficits. Both of these provisions were left out of a previous stimulus package passed in December. 

Using vacation days for quarantine 
Now that a bill that required employers to give up to two weeks of paid coronavirus sick leave has expired, many Americans will now have to start using vacation days to get paid if they have to quarantine. WAFB’s Matt Houston reports: 

Some employers will continue to offer the extra time off to their employees who cannot work, though, because the feds have promised to offset the payroll costs with tax credits through March. “The lack of access to paid sick days will continue to exacerbate a global health pandemic,” Louisiana Budget Project policy advocate Davante Lewis said. “When you don’t have access to paid sick days, you’re going to push yourself through work.”

Click here to read a brief by LBP policy director Stacey Roussel outlining a paid leave program that works for Louisiana. 

Another push for gas tax increase
Proponents of an increase to the state gasoline tax will once again push for their proposal during the spring legislative session. But this time, they have a new author for their bill. Rep. Jack McFarland, who has rejected tax increases in the past, acknowledged the need to invest in Louisiana’s antiquated, and in many cases, structurally deficient roads and bridges. The Baton Rouge Business Report’s Stephanie Riegel outlines the proposal. 

The bill, which would require a two-thirds vote of the Legislature for passage, would raise the state’s gasoline tax by 10 cents in the first year and by an additional two cents every other year until 2033, when it would be a total of 22 cents higher than its current 20 cents. Each one-cent increase would raise an estimated $30 million, which, by 2033, would total some $660 million a year in new revenue. As currently envisioned in McFarland’s bill, 60% of those new revenues would go to maintenance of existing roads and bridges, which have nearly $15 billion in deferred maintenance needs. The other 40% would be dedicated to helping fund new “capacity” projects, including a new Mississippi River bridge in Baton Rouge, that would be specifically identified in the legislation. 

Number of the Day
– Percent of Louisianans who are having difficulty paying for usual household expenses. (Source: Census Bureau Household Pulse Survey)