Monday, 25 June 2018 16:12

Fiscal Cliff fixed: Tyler Bridges gives Louisiana budget deal overview

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FISCALL CLIFF FIXED 7Finally, after three special sessions and a regular one, it's time to relax, do the things that hard-working legislators (and governors) long to do after a long grueling hard-fought battle over the budget--pick up the pieces of one's life and, if at all possible, spend quality time with family, check out those hires burning at the office and hopefully take a moment of leisure.

The fiscal cliff, that seemingly insurmountable object in front of every legislative session since Bobby Jindal took his shot at taming the budget, is fixed. Yes, fixed. At least, on paper and hopefully, in reality, until perhaps, the next mid-decade.

The Louisiana legislators and governor, who have spent almost every day in session since mid-February of this year, have settled upon a budget deal that reduces the sales tax from five cents to 4.45 cents. Today, The Advocate reporter Tyler Bridges, who has been there with the legislators as each tick has tocked on the capitol clock, took a few moments to discuss with me--the session and the budget agreement. The interview occured via Facebook and Twitter Live.

Below is the video transcript of the relevant portions of the interview with Bridges, who will also soon post a "behind the budget deal scene" article for The Advocate.

BRIDGES: The legislature last night wrapped up its 7th special session under this governor and the third special session this year and what has bedeviled the legislature and the governor is how to fully pay for the services of government.  Back in 2016, the legislature met in the first special session and authorized a 1 cent increase in a sales tax but only for 27 months to fill the budget gap left over by Bobby Jindal and the previous legislature. And ever since then the legislature has been trying to come up with a more permanent solution to the state's budget problems and overtime failing to do so this has developed into a budget crisis and now they were really up against their backs their backs are up against the wall in this 7th special session or the last several days because they had to solve this problem by July 1st-- that there's the phrase and the Capitol been there was a fiscal cliff that was when this temporary sales tax money was going to drop off and July 1st is that is the budget year begins on July 1st so that sales tax was going to end on June 30th and the governor and the House the Senate and some House Republicans favored renewing a half a cent of the expiring one cent.  

In the last special session that which was the sixth special session, the conservative Republicans would go no higher than point three three of the expiring one cent, while the governor and the others were wanting a half and they could not reach agreement.  In this latest special session over the past week Republicans said okay well we'll renew four-tenths of the expiring one penny while again the governor the Senate Democrats in the House and some Republicans in the House said oh no we want that the half cent. So the two were were at loggerheads over that it's about a million a hundred million, ninety million dollar difference or so between the two. The governor and the others said hey we need this full amount to be a fully fund TOPS, food stamps, housing inmates, the other costs of higher education pay for the operations of DA offices, a host of items. Whereas Republicans and the conservative Republicans in the house said you know government's too big we don't want to authorize that full amount. 

And then, on Friday the--after many many many tries the the two sides in the House, because that's where the issue was, reached a compromise agreement where again the governor and the others wanted 0.5 the conservatives wanted .4--they settled on the midpoint .45, that was Friday and then the Senate met yesterday ratified that and they also agreed the House and the Senate agreed on how to spend the extra revenue that was be coming in.  So they they they did what they call Sine Die last night which means that they they finished up.  So people who are tired of the standoff in the legislature, comparing at the gridlock in Washington, that is now over. 

SABLUDOWSKY: Okay so I'm looking at a post from Lynn Matthews on Facebook, she says that that she knows it's only one half or or 0.33 but where does it end?  Because Louisiana is the highest tax state, I think that we're still the highest tax state, so let me just piggyback on on that question and and that is to say that this deal is extended to what 2024, am i correct? 

BRIDGES: The sales tax renewal instead, again, with one cent expiring they've now renewing 0.45 that gives the state a state sales tax of 4.45 or five right currently it's 5 but again that one side is dropped.  So when you have the state sales tax at five percent on top of local tax, the combined local and state tax this means that Louisiana has the highest sales tax rate in the country. Now that they're dropping that one cent down two point four or five the combined state and local sales tax rate no longer will be the highest in the country. Overall when you combine all the various taxes actually Louisiana is down near the bottom and how much people pay in taxes in the state although people probably don't feel like that. 

SABLUDOWSKY: So that that's combined property tax and personal income tax is that what you're saying? 

BRIDGES: When you combine all taxes, again, the Tax Foundation out of Washington says that Louisiana is one of the lowest tax states in the country. 

SABLUDOWSKY: Okay now the argument is that Louisiana gets more federal aid than most states so you're saying that that we're not just getting the most federal aid or close to it but we're also the lowest tax state? 

BRIDGES: Yeah Louisiana, according the Tax Foundation, the tax bite in from all the various tax sources is among the lowest in Louisiana, but sure, in poorer states tend to get more federal-aid.  You know, people in Louisiana loved to blast Washington politicians, run against Washington, but actually Washington sends the state back more money than it than the state sends to Washington and federal taxes. 

SABLUDOWSKY: So a question I have is this-- somebody say was like a deux ex machina, in terms of we got a windfall, we got a windfall in a sense from the the Trump tax reduction, in terms of more money coming into the state and also we, what about the internet tax issue that just occurred last week?  And in my you know I guess the combined question is did the internet tax have anything to do with the settlement, I'm sure that the Trump tax did? 

BRIDGES: The Trump tax, the cut by Congress and and and and the Trump administration of President Trump last year meant, that actually ironically the state was going to collect an extra three hundred million dollars because of a provision in the state tax code so when they had to figure out a way to balance the budget for the fiscal year beginning July 1st, the the federal tax cut actually was producing more money to the state of Louisiana so it made it a little easier.  

Separate issue is the Supreme Court ruling on Thursday, that said that states can begin collecting taxes on over the internet and Louisiana, like most states, is not in position to do so, legislation has passed the state but that seems to set it up but it's it's gonna be a while before with the legis--for that state officials can figure that out. But on Thursday, that it did cause a stir for several hours in the legislature as they were trying to figure out how to reach agreement on sales taxes, whether actually the Supreme Court ruling would be an additional revenue for the state so they didn't have to raise sales tax as much as they wanted. 

They ultimately did realized that that that ruling is not going to be of any benefit for the immediate task at hand which was to balance the budget again by by the end of this month. So again the situation is, the most important point is, that the the house and the governor and the others reached agreement on Friday, the Senate ratified that last night and the legislature has now gone home. 

SABLUDOWSKY: One last question before you go home--meaning the end of the show and I really do appreciate you taking your time being with us, but the last question I have is, how do you pay for 4.45 cents in state tax?  I mean, you know, what are the retailers in gonna do in terms of collecting 4.45 opposed to five cents? 

BRIDGES: Yeah it's not like someone's going to have to take out 0.45 in terms of coinage. Typically what happens is from what i've read, is that retailers will round up to the next penny so so we're only going to be talking about a small amount of money.  This extra sales tax is is only gonna mean thirty, forty dollars for almost all Louisiana citizens. 


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Let me just say one other thing Steve, the legislature has met for 15 weeks this year, three special sessions and a regular session, they finally figured it out.  I wrote a big story after the last special session on the final, on the final day of the that special session, the two tax bills died and I wrote kind of a behind-the-scenes account of how that all happened, i've now put together a story of how it all came together on Friday.  Interviewed a number of legislators and that story I'm thinking it's going to be posted on the Advocate website today and will be in the newspaper tomorrow.  Be a long story behind the scenes account finally it all came together  (Read Tyler Bridges's article here)

SABLUDOWSKY: Okay would you send me the link or as soon as I get it then i'll go ahead and post it, as many ways as I can--you want to talk about your book for a second I know that you gotta go but 

BRIDGES: Yeah sure, a Long Shot is my book on the 2015 governors race--with Jeremy Alford-- thank you for asking Steve, it's called Long Shot--A Senator, a Soldier, a serious sin--and anybody wants to pick up the book, they can get it at Louisiana it over the net.  Louisianalongshot com --if they do that, they'll get a signed book by me and Jeremy my co-author




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