By Julia Arenstam Staff Writer
Several state legislators from the Houma-Thibodaux area say the state’s future looks more stable with the extension of a temporary sales tax.
Reps. Beryl Amedee, Tanner Magee and Jerome Zeringue, all R-Houma, and Sen. Bret Allain, R-Franklin, spoke to the Houma-Terrebonne Chamber of Commerce Tuesday following the closure of the special session of the state Legislature on Sunday.
During the third special session of the year, lawmakers agreed to keep 0.45 percent of a 1 percent sales tax that was added in 2016. The rollback will bring the state sales tax rate from 5 percent to 4.45 percent, beginning this Sunday.
The state was facing about $500 million in cuts if more funding wasn’t found.
“There really wasn’t an alternative,” Zeringue said.
While the majority of the legislators Tuesday said the partial rollback of the sales tax would provide some stability to the state budget, Amedee said she would have liked it seen it eliminated.
She cited possible revenue increases coming to the state, including those from increasing oil prices, Internet sales tax and federal tax reform.
“I don’t see the compromise,” Amedee said.
With that additional revenue on the horizon, Amedee said, she would begin drafting legislation to end the 0.45 tax before its current seven-year sunset.
But, Zeringue said seven years could provide time for legislators to work out reforms to the overall budget.
“We can’t continue to rely on balancing the budget by cutting the two things we rely on,” he said, referring to health and education.
Businesses can also benefit from knowing rates will be stable until 2025, Allain said.
Although the U.S. Supreme Court ruled that states can collect Internet sales tax from businesses without a physical presence in the state, Magee said, implementing that will take time.
Amazon is already collecting sales taxes voluntarily.
Louisiana is one of two states that do not have centralized tax collection systems. There are 64 different tax collectors in the state. Most states have one.
At the earliest, it will take a couple of years to centralize the tax system even if it is supported by the majority of legislators, Magee said.
Centralizing tax collection could be done through a constitutional convention, which at last vote was 20 votes short of passing, he said.
It could also be done by coming to an agreement with local tax collectors, Allain said.
For the second year in a row, the state fully paid for higher education, legislators said. The TOPS program was also fully paid for this year. And potential cuts to district attorneys’ and sheriffs’ offices were taken off the table.
“Is it perfect? No. Is it the best in the world? Absolutely not,” Magee said about the new budget.
Without the revenue from the renewed tax, Fletcher Technical Community College would have lost $400,000. Nicholls State University would have also suffered a hit, Magee said.
“Higher education is the key to economic stability and recovery,” Zeringue said. “It’s the lifeblood of our economy.”
Legislators were criticized for requiring a third special session of the year, their 10th since the current term began in 2016.
But when the first convened in February, Allain, vice chairman of the Senate Finance Committee, said they didn’t have time to work on the budget.
When cuts were proposed to departments across the board, they were vetoed by Gov. John Bel Edwards, leading to the second special session that which ended without a vote on taxes, Allain said.
“It took us way too long to come to a compromise,” he said.