Responding to Republican resistance to his tax and spending plans, Gov. John Bel Edwards told lawmakers Monday he's willing to consider other ideas but warned that Louisiana "cannot deliver critical state services on political soundbites."
The Democratic governor said Louisiana's leaders need to remedy the cycles of unstable state finances in this two-month regular session without falling into partisan talking points. The governor is pushing a tax overhaul that aims to end the budget gaps by more heavily taxing businesses, but he's gotten little consensus on the concept so far.
"This is the big moment. The structural deficits have gone on for too long. The resistance to doing what is right and necessary to fix this problem once and for all is no longer acceptable," Edwards told a joint session of the House and Senate.
Republicans, particularly House GOP leaders, haven't embraced Edwards' ideas. Rather than support a tax plan to raise more dollars for the state treasury, they're suggesting reductions in state government spending — though without offering a roadmap so far of what programs they'd like to eliminate or what services they want to cut.
Edwards struck directly at them, without specifically citing their party or naming anyone. He said if lawmakers want to talk about "lower taxes and a more efficient state government," they need to follow that up with "exactly what is it you intend to cut, what college or hospital do you want to close, what road in your district you'd rather not see built or repaved."
"Criticism is only as valuable as the input and the action that follows it, but we have seen very little constructive input and practically no constructive action. It just isn't helpful," he said.
Edwards' tax package is intended to replace $1.3 billion in temporary taxes set to expire in mid-2018, while also raising another $400 million for next year's budget that the governor wants to spend on the TOPS college tuition program, K-12 education and other items.
The proposals would continue the planned drop in state sales taxes from 5 percent to 4 percent, while charging the tax on new items such as cable television, telephone services and digital streaming services. Some tax breaks would be lessened or eliminated. Individual income tax rates would drop. The corporate franchise tax would be phased out.
Many parts of the package would require hefty, two-thirds votes from lawmakers, including the centerpiece proposal, a new tax on gross receipts called a Commercial Activity Tax.
Edwards said the plan is aimed at making sure businesses are paying "their fair share," and he cites data that 80 percent of corporate income tax filers in Louisiana didn't pay state income taxes in 2015.
"That means a CEO's administrative assistant at some of the most profitable corporations paid more in state income tax than the companies he or she works for. That just isn't right," he said. "Basic fairness demands that we do better."
He said his proposals would lower the tax bills of 90 percent of personal income taxpayers.
Business groups and many GOP lawmakers say the gross receipts tax would harm companies working on tight margins by not accounting for profit or expenses. They say it can have a pyramiding effect, applying to every transaction in a production chain. And they worry it could chase away business in a state with one of the nation's highest unemployment rates.
Stephen Waguespack, president of the Louisiana Association of Business and Industry, described it as a "tax on all commerce in Louisiana."
Rep. Rob Shadoin, a Ruston Republican who often works with the governor, said he doesn't see much support for the tax so far.
"We don't have a whole lot of time once we get to spinning and ginning down there to sit back and evaluate and analyze, especially a new idea like this," he said. "I might be surprised, but right now I just don't see a lot of momentum behind that."
Lawmakers also will consider whether to raise Louisiana's gasoline tax for the first time since 1990 to improve roads, bridges and ports in the state.
And they'll haggle over whether to rewrite criminal sentencing laws to end Louisiana's tenure as the state with the highest incarceration rate. Among other issues up for debate are whether to raise the minimum wage, enact equal pay legislation and eliminate the death penalty.
The legislative session must end by June 8.