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27.5.21

LA Senate tax hike try may hang GOP out to dry

A late session sleight-of-hand stupidly supported by some of the Louisiana Senate’s most conservative members may provide the first test for the House of Representatives’ new Conservative Legislative Caucus.

At the start of Wednesday, HB 514 by Republican state Rep. Tanner Magee applied sales tax to medical marijuana. But when it hit the floor that afternoon, Magee allowed its hijacking by amendment to make permanent the sales tax hike instituted first in 2016 and supposed to expire over two years later, but which in part got extended to 2025. Over the next three years its avails gradually would be diverted to roads construction until by the time it would have expired the entirety would go to that object. It also delays giving back the entirety of a tax on manufacturer use of utilities.

The bill lists several projects that would receive priority, which have appeared as distinct line items in several bills this session, to where three-quarters of the avails should go until these reach completion. This larding of pork appeared to appease several senators, particularly GOP state Sen. Barrow Peacock who was mentioned as a collaborator on the radical change and whose SB 1, stalled in the Senate, would take a much more reasonable approach of diverting the tax increase for roads but with it expiring as intended.

Amazingly, several freshmen Republican senators who in their campaigns voiced opposition to tax increases, if not pledging tax decreases, voted for the amendment, which passed with the two-thirds threshold for such increases and would shuffle a forecast $370 million a year to infrastructure. They include Mike Fesi, Patrick McMath, Barry Milligan, Robert Mills, and Mike Reese. GOP newcomer Stewart Cathey, like Peacock mentioned as an amendment collaborator, also abandoned opposition to ending the tax as outlined in his bill similar to Peacock’s, SB 30.

Their affirmative vote came with disregard of reforming existing policies regarding transportation spending that, if changed, could save considerable money to put towards roads construction. At least $123 million a year could be saved by not having state taxpayers foot the bills for transportation activities typically the responsibility of local governments or some users. Some, like state Sen. Glen Womack, explicitly said during their campaigns that this spending should be examined first, and only then taxes to support more building be considered.

And another new Republican state senator, having previously served in the House, Jay Morris in his House days once stated in reference to opposing an increase the cigarette tax that “Trying to collect all of our taxes from poor people is not good tax policy.” Like that tax, sales taxes are regressive, which in paying take up a higher proportion of poorer household finances.

Their vote not only made them seem hypocritical and/or untrustworthy, but it also may have come in vain given the formation of the new House caucus, whose members pledge to follow fiscally conservative values. The totally revamped bill has a few hurdles to overcome. It wasn’t declared or even moved to vote as nongermane, although it easily could have been. Because of the vast fiscal change it needed recommittal to the Senate Finance Committee, but the floor vote indicated it should make it out of there.

But it still requires a two-thirds vote in the House to accept the Senate changes, and the caucus boasts 39 members with one in the offing. If all stick together, they can defeat the bill. Plus, only four of 12 Democrats voted for the amendment in the Senate (there was no vote on the entire bill because of the recommittal), apparently not because they wanted to cut taxes as a general principle but because they don’t like the regressivity of sales taxation. So, the caucus will get backup from a significant number of Democrats.

Regardless, if the new caucus wants to display its seriousness and live up to its stated principles, this would be the perfect instrument to prove itself. Which means a number of Republican senators will end with their voters feeling betrayed and egg on their faces, all for nothing.

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