Governor Edwards laid out more details this morning as he talked about the budget on WRNO Radio with talk show host, Gerry Vaillancourt.
Edwards said the sales tax proposal was an “essential component” for the first plan of attack he said “we inherited” what he further described is the largest revenue shortfall in history threatening the ability to undertake the most basic essential services.
Edwards said the Revenue Estimating Conference will meet February 10 and the revenue situation could stay the same or “get a little bit worst”.
The Governor reiterated that the short-term problem of filling the $750 million dollar shortfall for this budget year and plugging the $1.9 billion dollar hole for the fiscal year of 2017 does not provide improvements for K-12, salary merit increases but only provides same services as this year.
Edwards emphasized that this “does not grow government or allow us to do things we’re currently doing”.
Edwards said the “Sales tax is bridge, allows us to get to more permanent structure and is “essential component” because it allows us in the special session to make a change to realize some of the revenue we need to address the $750 million dollar shortfall for this fiscal year”.
The governor said the tax would continue as a bridge until we get to a new tax structure of best practices recommended by experts such as Jim Richardson of LSU and the Tax Foundation that have a broader income tax base for individuals and corporations but with lower rates.
He said the state “would tie the penny sales tax increase to the constitutional amendment so if it got passed, once it was implemented, the sales tax would fall off. The constitutional amendment would end the deduction for federal tax liability”.
Edwards noted that only two states offer the deduction and said it would allow the state to lower income tax rates in exchange for the elimination of the deduction.
The new governor said, we need the sales tax so we don’t have to make huge cuts in higher education and healthcare and that the sales taxes are “one of a menu of options for us to consider”.
Asked about whether he can expect assistance from the republican controlled legislature, Edwards said, “I do believe there is a common understanding and a willingness to work” and “I’m going to work with everybody and I hope we can shed party labels at the door”
He said, he has every expectation this will happen, already have had meetings with legislative leaders
The Democratic governor said that without bringing in the new revenue “The future for our kids is going to be much dimmer than it should be and certainly that is not what the people of Louisiana expect of us”
As a sign that he sees the process of one to negotiate, he said he “would work with everyone to see where the middle ground is”