BATON ROUGE, La. (AP) — Lawmakers properly passed a tax change aimed at raising $103 million to balance the state's budget, a judge ruled Monday, dismissing a lawsuit by the Louisiana Chemical Association.
The organization argued that the temporary suspension of a 1-cent sales tax exemption on business utilities didn't receive the required votes for passage in the state House of Representatives and was unconstitutional.
State District Judge Michael Caldwell disagreed.
"I think the procedure for adoption for this concurrent resolution was in accordance with the constitution," he said after hearing arguments from both sides.
Chemical association spokesman Rob Landry said in a statement the organization will review the judge's decision "and evaluate our options before deciding whether to appeal."
Lawmakers scaled back dozens of tax breaks earlier this year to generate more money for the state treasury and stop deep cuts to public health care services and colleges. Suspension of the business utility tax break expires in August.
The suspension amounts to a short-term tax increase that heavily hits chemical plants.
The chemical association, which represents companies that operate 108 plants across Louisiana, sought to have the legislation declared unconstitutional because it didn't receive support from two-thirds of House lawmakers.
The House and Senate took two votes each to pass the legislation. Both times, the Senate had more than a two-thirds vote for the measure. The House never reached that mark, which would have been 70 votes. The first House vote May 7 was 63-41, and final passage came with a 60-42 House vote June 11.
Linda Akchin, lawyer for the chemical association, cited constitutional provisions that require a two-thirds vote to levy a new tax, increase an existing tax or repeal a tax exemption and that describe a law suspension requiring the same vote and procedures that were needed to enact the law.
Akchin said a suspension is a "form of repeal."
"Bottom line, they cannot use their suspension power to do something unconstitutional," she said.
House Clerk Alfred "Butch" Speer, the attorney representing the Legislature, said the constitution distinguishes between suspension of a law and repeal of a law. He said the two-thirds vote the association claimed was required to suspend the tax exemption was not contained in the constitution.
The temporary suspension of a tax break, Speer said, "is not the imposition of a tax. That is not the increase of a tax." The tax, he said, was levied decades ago.
Caldwell said the Louisiana Constitution allows for the suspension of a law with the same votes as the law was passed. Since the tax break didn't need a two-thirds vote to pass, the suspension of it doesn't need a two-thirds vote, he said.
It's unclear if the tax break suspension will generate as much money as was expected. At a recent state income forecasting panel meeting, the Legislature's economist said fewer business utility sales taxes were being paid than had been projected and collections could be as much as 40 percent lower than expected.