John Edwards Fast Facts

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John Bel Edwards urges Louisiana residents to get behind his tax plan

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Louisiana Gov. John Bel Edwards delivers his opening address for the special legislative session at the Earl K. Long Gymnasium on the campus of the University of Louisiana-Lafayette, Tuesday, May 22, 2018, in Lafayette. (Scott Clause /The Daily Advertiser via AP)
Louisiana Gov. John Bel Edwards delivers his opening address for the special legislative session at the Earl K. Long Gymnasium on the campus of the University of Louisiana-Lafayette, Tuesday, May 22, 2018, in Lafayette. (Scott Clause /The Daily Advertiser via AP)

By Julia O'Donoghue

julia_odonoghue@nola.com,

NOLA.com | The Times-Picayune

LAFAYETTE -- Gov. John Bel Edwards bypassed speaking to state lawmakers about the state's budget crisis and instead tried to address the public directly in a speech Tuesday (May 22), given a couple of hours before the opening of the Louisiana Legislature's second special session on fiscal issues this year. 

Appearing at the University of Louisiana-Lafayette, Edwards urged citizens to get behind a tax plan he is pushing and to reach out to their own lawmakers to support it. The governor typically opens sessions by addressing the Legislature in the state Capitol. That approach hasn't gotten much traction in the past, so he decided to try talking directly to the people, he said.

"The decisions made inside the Capitol affect those of you outside of it. They affect all of us, so it just made sense to come here and talk about what lies ahead," said Edwards, a Democrat, in his prepared remarks.  

House Speaker Taylor Barras, R-New Iberia, characterized the governor's speech at the University of Louisiana-Lafayette as "a press conference with [Edwards'] supporters at a public university".

The event was attended by a handful of Republican legislators, mostly from the immediate Lafayette area, and many more Democratic lawmakers. Members of the governor's cabinet and lobbyists also made the trip from Baton Rouge to Lafayette for the speech. 

"Today's political theater will not change our priorities of working on behalf of Louisiana taxpayers in this special session," Barras said in a video the House Republican Caucus released Tuesday afternoon. 

Before laying out his plan for fixing the budget problem, Edwards spent a few minutes at the beginning of his speech defending his decision to veto the budget the Senate and House approved last week. Though that veto wasn't popular with lawmakers, it drew huge cheers from the crowd in the University of Louisiana-Lafayette gymnasium Tuesday. 

Edwards and lawmakers agreed that the vetoed budget proposal wasn't adequate. It would have cut food inspections and the food stamp program in the state as well as other state services. But legislators had billed it as a starting point headed into the special session, a plan that would list the state's top priorities and bring calm to people worried about health care cuts that have been floated. 

Time is running short to come up with a solution. About $1.4 billion in temporary taxes will expire at the end of June, blowing a $648 million hole in the state spending plan that is supposed to go into place July 1.

"Over the next two weeks, we have a chance -- our last chance -- to make the responsible choice to solve a problem that has for too long now has held us in limbo -- a problem we have seen coming for two years," Edwards said.  

The bulk of the Legislature -- dominated by Republicans who are generally skeptical of taxes -- have resigned themselves to the fact that at least some of that tax revenue falling off the books must be replaced, in order to preserve critical and popular state services. 

"We are on the same page. We want the same things," the governor said.  

In his speech, Edwards proposed that Louisiana fix its financial woes by implementing a 4.5 percent state sales tax rate after July 1. The current rate is 5 percent and is scheduled to drop to 4 percent in July. 

The governor is also proposing eliminating dozens of sales tax exemptions that were expected to come back online after being suspended for two years. He also said Louisiana should get rid of state residents' ability to deduct taxes paid last year from their current year's tax bill. Some reductions to tax credits and rebates should also become permanent, he said. 

That tax plan is a shift in the governor's position from just a year ago. Edwards initially had said that he did not want to adopt a higher sales tax rate on a permanent basis and would only accept it as a "bridge" to making other changes. In recent months, however, he has become more open to accepting a higher sales tax rate permanently -- an approach Republicans favor. 

It's not clear though whether Democrats in the Legislature, particularly members of the Black Caucus, are willing to go along with the governor's plan. A special session on taxes earlier this year ended in failure, in part because Black Caucus members refused to vote for a sales tax increase unless it came along with an income tax change as well. 

Louisiana has the highest average sales tax rate in the country, when local and state levies are taken into account. Economists agree that high sales taxes are more of a burden on poor people, which worries Black Caucus members.

It only takes a handful of Black Caucus members -- four or five people in the House -- to tank an entire tax bill vote. So even if the majority of the Black Caucus goes along with Edwards' plan, it might not be enough if a few people still hold out and oppose a sales tax hike. 

Barras and other legislators have questioned whether the Legislature will be able to pass replacement taxes and craft a new budget by June 4, when the special session is scheduled to end. The House Speaker said the governor's decision to veto the Legislature's budget proposal will make that timeline difficult to meet. 

"It seems that the governor was determined to set us up to fail," Barras said in the video released Tuesday afternoon. 

Senate President John Alario, R-Westwego, said the governor's decision to veto the budget doesn't necessarily have to slow the Legislature down. Lawmakers could introduce the same budget bill as they approved and sent to the governor -- and start working from that plan to make deliberations move faster, he said.

Alario, who has been in the Legislature for over 45 years, worries the House isn't getting going fast enough on the budget and tax bills to finish by June 4 though. Budget meetings haven't been scheduled yet and the House Ways and Means Committee hadn't scheduled tax bill votes as of Tuesday afternoon. 

"It's too slow for me. I like things to move," he said in an interview. 

Edwards chose the University of Louisiana-Lafayette as the location for his speech for many reasons. It gave the governor a chance to tout a new economic development expansion with CGI, a French information technology firm that is committed to adding more jobs in the Lafayette area, the governor said. 

He was also able to highlight the devastation that doing nothing about the state budget and tax issues would mean. Down the street from the university where Edwards spoke, Lafayette General Medical Center sent out 700 notices to its employees earlier this month, warning that the hospital might shut down if the state can't fully fund it. 

The University of Louisiana-Lafayette is also in the backyard of Barras. Edwards has had a hard time reaching a compromise on taxes with the House Republican leadership. Despite living nearby, Barras did not attend the governor's speech. 

The Edwards' administration and legislative leadership also checked in with economists Tuesday to see if there was any hope that a boom in oil prices would have lessened Louisiana's financial deficit coming in July. The economists said the deficit was still $648 million -- and the recent spike in oil prices hadn't had an impact on their economic forecasts. 

Source : http://www.nola.com/politics/index.ssf/2018/05/louisiana_budget_fix_governor.html

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