La. House passes sales tax to stave off budget crisis; special session expected to wrap Sunday

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BATON ROUGE — The Louisiana House of Representatives approved a measure today that, if approved by the Senate, will stop the state from approaching a fiscal cliff.

The House voted 74-24 to implement a state sales tax rate of 4.45 percent starting July 1. Currently, the state sales tax is 5 percent, but 1 percent of that expires June 30. The House approved extending .45 percent through 2025.

Gov. John Bel Edwards said he expects the Senate to approve the bill Sunday night, ending the Legislature’s third special session this year.

“Today, we made tremendous progress in restoring our finances and our accountability,” Edwards said. “This plan is not perfect, but that’s the nature of a compromise.”

Both chambers have been unsuccessful in raising revenue during the past two special sessions, largely because the Republican-led body went head-to-head with Edwards over raising taxes. Without the new sales tax, the state was looking at a $650 million budget shortfall for the next fiscal year, which begins July 1.

The budget compromise fully funds TOPS, the state-run college scholarship program, as well as higher education and food stamps. But Edwards said the state’s budget will have $100 million less than it did this year.

A compromise, Edwards said, is when “you solve the immediate crisis … but you’re not ecstatic because you know you could have done better.”

“(We’re) not over the goal line yet … (but) the hardest step in the process was taken today,” Edwards said.