Session ends in drama, disappointment



Session ends in drama, disappointment

 

Session ends in drama, disappointment

Effort to pass tax bills falls short in final hours

BY TYLER BRIDGES

tbridges@theadvocate.com

By midafternoon Monday, state Rep. Lance Harris had found himself in a political box.

A burly Republican from Alexandria - known for his imposing physical presence, flashy suits and coiffed gray hair - Harris had been pushing a conservative plan to address the state's tax and budget problems by renewing one-third of an expiring 1 cent of the state's 5-cent sales tax.

In a meeting that morning, on the final day of the special session, he had told Gov. John Bel Edwards that the Republicancontrolled House remained committed to that plan, unwilling to go along with a half-cent renewal favored by Edwards and other lawmakers.

The trouble for Harris was that he didn't have the votes to force it through. Renewing only a third of the one-penny tax wasn't going to raise enough money to avert deep cuts to popular programs. So by midafternoon, he was floating

the idea of also ending several tax breaks for businesses in order to generate more revenue.

It caused a minirevolt. Business lobbyists quickly got word and texted their opposition to sympathetic Republican lawmakers. In meetings with two separate groups of legislators in the members' lounge off the House floor, Harris ran into heavy resistance and had to retreat.

But business lobbyists already were spooked and decided to rally behind the competing plan for a half-cent renewal of the sales tax offered by state Rep. Walt Leger III, D-New Orleans.

Over the next eight hours, the two sides tried to win over lawmakers, in one-on-one conversations and larger meetings behind closed doors. The situation came to a head about a half-hour before midnight, when the House voted on one tax plan and then the other during the final frantic minutes of the special session.

Both proposals failed, though the half-cent renewal won the most votes, falling short by only seven of the 70 needed in the House. Nearly every Democrat and a sizable contingent of Republicans supported it.

The two votes meant that although the Legislature approved a budget on the final day, some $504 million in government programs remain unfunded for now.

About 20 minutes after midnight, Edwards, standing behind a podium in the press room on the fourth floor of the State Capitol, said he would have to call another special session to try once again to raise enough money to prevent deep cuts to the Taylor Opportunity Program for Students scholarships, the state's public colleges and universities, and the operations of local jails and the offices of district attorneys. Without more money, a recently constructed state juvenile prison in Acadiana will remain shuttered, and a just-passed program to make state spending more transparent will not get off the ground.

The next special session will be the seventh during Edwards' three years in office, and there's no guarantee it will be successful. Solving the budget crisis will mean somehow overcoming the same obstacles that have so far prevented any compromise: a sharp divide over taxes, despite the small amount of money at stake for consumers; the continuing inability of Speaker Taylor Barras to exercise clear control over the House; and the deep distrust between Republicans and Democrats in the House in an increasingly polarized political environment.

This account is based on interviews with 11 key lawmakers - including Harris, Leger and Senate President John Alario - as well as a review of the videotape of the final day.

Edwards called the special session that ended Monday after a regular session that wrapped up in mid-May without the Legislature approving a budget for the new fiscal year beginning July 1 to pay for the continuing operations of state government or to raise all of the revenue that most lawmakers wanted.

During the special session, Edwards wanted to raise $648 million, the difference between how much the state will spend in general tax dollars for the fiscal year that is ending in three weeks and what the state is slated to collect in the fiscal year that is about to begin. He was reluctantly supporting the half-cent renewal of the 1-cent sales tax scheduled to expire on June 30 - along with extending other temporary sales taxes - to raise the needed amount.

Harris and conservatives in the House favored the thirdcent renewal, which would raise about $365 million and force nearly $300 million in cuts to government programs. Meanwhile, fiercely anti-tax conservatives opposed renewing any part of the expiring penny as a way to dramatically reduce government spending.

So as Monday began, the battle lines were clear.

The night before, the Senate had overwhelmingly approved budget and tax bills that would raise $540 million while renewing the half-cent. These votes meant that the Republican-controlled Senate, Edwards, most Democrats in the House and some Republicans in the House favored the half-cent renewal.

The key question to be determined on Monday was this: Would the more conservative members of the House go along?

Harris, who heads the Republican House caucus, said no when he and two other Republican state representatives - Johnny Berthelot and Clay Schexnayder, both from Gonzales - met with Edwards that morning. The House would stand behind the third-cent renewal, Harris said.

But Harris, Barras and other House leaders had to offer an alternative proposal or the special session would collapse, and they likely would get the blame. So Harris and state Rep. Cameron Henry, R-Metairie, who chairs the budget committee, spent the next several hours trying to fashion alternatives while most House members lounged at their desks in the House chamber and senators waited in their offices in the Capitol basement.

Harris had been working tirelessly for weeks to win support for his proposal. An antitax conservative, he felt like he was compromising just by offering the third-cent renewal.

In an interview five days earlier, Harris had readily acknowledged that the difference between the third-cent and half-cent renewals was small for most taxpayers.

Nearly 70 percent of Louisiana households earn $50,000 or less, and the difference between the two tax proposals would cost them no more than $23 per year, according to LSU professor Jim Richardson. Households earning $100,000 a year or less - which covers 80 percent of Louisiana residents - would pay no more than $48 more per year.

That the difference was small didn't matter, Harris said. What mattered was forcing down government spending by reducing tax revenue.

The lower tax renewal rate, he said, ''gives people more freedom to use their own money.''

But on Monday, even conservatives were telling Harris that his plan would cut government programs too much. That led him to examine ways to make businesses pay more.

Will Green, who represents car dealers, feared that Harris wanted to raise the sales tax that car buyers pay on new vehicle rebates. He spread the word to lawmakers that his group opposed the idea.

Greg Bowser, who represents chemical companies, was at the hospital where his wife was undergoing surgery when he got word of Harris' efforts. He texted his opposition to Harris and called other lawmakers.

Harris then met with the two groups of Republicans midway through the afternoon and faced a chorus of opposition.

About 7 p.m., Harris and two other House members went to the Senate president's office to try to hash out an agreement on a tax plan between the House and Senate. The meeting didn't go well. Harris said he thought he had at least 70 votes - the two-thirds necessary - to win approval for his measure in the House. State Sen. Eric LaFleur, D-Ville Platte, and state Sen. JP Morrell, D-New Orleans, said they were hearing from other House members that he was far short.

They pressed Harris for specifics on the $100 million of budget cuts that would be required if the Legislature approved the third-cent renewal. Harris, according to Morrell, couldn't say. That was unacceptable to Morrell, LaFleur, Senate President Alario, RWestwego, and other senators. This meant that the House and Senate remained apart on the tax plan.

A supermajority of the Senate supported spending the extra $540 million and renewing the half-cent to pay for most of it. But Barras, Harris and Henry couldn't gather a consensus in the House behind their plan.

Alario, who twice served as speaker of the House,had wanted to give the House leaders every opportunity to find that consensus. Concluding that it wasn't possible, Alario told Leger that the Senatewanted to move forward with his House Bill 12,

which would raise $500 million next year by renewing the half-cent sales tax and several other taxes.

But that could not happen until lawmakers solved another thorny issue: whether to expand a tax break for the working poor known as the Earned Income Tax Credit. Members of the Legislative Black Caucus were insisting on an expansion of the tax credit to offset the extra money the poor would pay by renewing the half-cent sales tax. So: No tax credit, no sales tax renewal.

Members of the Black Caucus had helped blow up the special session that ended March 4 and attempted to solve the same budget crisis. So other lawmakers had to try to address their demand.

The House first attempted to do so when it voted on House Bill 18 by state Rep. Katrina Jackson, D-Monroe. It would have expanded the tax credit and ended several tax breaks. At 9:11 p.m., the House voted 52-51 in favor of Jackson's bill, but to pass, it needed 53 votes, the bare majority in the 105-member House.

Members of the Black Caucus were furious, and some favored sinking the special session once again.

But several others crafted an acceptable alternative that would delay implementation of the Earned Income Tax Credit for one year. This meant that HB18 would raise $34 million next year and help plug the budget hole.

Now, after hours of inaction, legislators favoring the higher spending and tax rate were ready to make a final push. The special session would end in an hour at midnight.

At 11:01 p.m., the Senate passed Jackson's HB18. Three minutes later, the House followed suit on a 54-49 vote. Two Republican representatives from Lafayette - Stuart Bishop and Jean-Paul Coussan - switched from nay to yea to ensure its passage.

Events now accelerated. At 11:06 p.m., the Senate passed Leger's HB12 with no debate, 32-6, or six votes more than the needed two-thirds majority.

Now if the House would pass the half-cent sales tax renewal, lawmakers would end the budget crisis and avert the need for another special session. Leger took up his bill in the House and pleaded with his colleagues to approve it.

State Rep. Alan Seabaugh interrupted him, however. Seabaugh, perhaps the most vociferous anti-tax conservative in the House, had a question for Speaker Barras: Leger's bill as originally introduced dealt with internet taxes, but the Senate had amended it by tacking on the half-cent sales tax and other sales tax renewals. Was the bill germane and thus constitutional? Seabaugh was certain that it wasn't and thus ought to be killed.

Barras replied that he could not rule on Seabaugh's question because the Senate had made the changes. However, Barras added, he didn't think they were legal.

At 11:33 p.m., the House voted on Leger's bill. It needed 70, or two-thirds. It failed, 64-40.

But in the seconds before the actual recording of the vote, state Rep. Julie Stokes, R-Kenner, approached House Clerk Alfred Speer to request that she be switched from yea to nay. So HB12 officially failed on a 63-41 vote.

In all, 22 Republicans - including such traditional antitaxers as Jack McFarland, of Jonesboro; Mark Abraham, of Lake Charles; and Franklin Foil, of Baton Rouge - had voted for it to fund programs that benefited their constituents. Barras, Henry and Harris were among the ''no'' votes.

Stokes went to Leger and told him that because she was now on the prevailing side - the nays had won the vote - she planned to make a motion to reconsider that vote.

Harris then sought approval for the third-cent sales tax renewal by bringing up his House Bill 27. He believed that enough Democrats would hold their noses to provide the necessary votes to pass it.

''It's better than going home without anything,'' he told his colleagues.

It lost badly, 38-66, marking the second straight defeat for the House Republican leadership.

There were now five minutes left in the special session. Stokes requested a motion to revote on HB12. The House approved bringing it back up by a vote of 56-48, three votes more than needed. The special session would end in exactly 64 seconds.

Leger immediately sought the revote on his bill.

But Barras chose to call on Seabaugh, who had requested an opportunity to speak on the bill.

Seabaugh made the short walk from his seat to the House lectern in the front of the chamber. A handful of lawmakers booed and shouted at him.

''So you're just going to let it run out?'' Stokes, standing to the right of the lectern, called out in disbelief.

Seabaugh ignored her and began to speak.

''We've already voted on it,'' he said. ''And yes, I am trying to run the clock out because we voted on this bill before. It did not get 70 votes. The body has spoken.''

''You're just trying to kill the session!'' Stokes shouted.

''Yes, I am,'' Seabaugh replied, half turning toward her.

''It's on you!'' Stokes yelled and pointed at him with both index fingers. ''It's on you, buddy,'' she added and walked away amid more shouts in the chamber.

Barras interrupted.

''Members, it is 12 a.m.,'' he intoned.

The special session was over.

The speaker then called on state Rep. Andy Anders, DVidalia, to formally end the session, with the Latin words sine die.

''I'm disappointed,'' Anders said. ''It's really hard to go home. … When you get home, you think about what you've done.''