Senators blast business for seeking to protect tax breaks

BATON ROUGE, La. (AP) — Democratic state senators grilled business lobbyists Tuesday on the second-to-last day of the special legislative session, saying companies aren't doing their fair share to help close Louisiana's budget gap. Lobbyists for the oil and gas industry, chemical plants and other...

BATON ROUGE, La. (AP) — Democratic state senators grilled business lobbyists Tuesday on the second-to-last day of the special legislative session, saying companies aren't doing their fair share to help close Louisiana's budget gap.

Lobbyists for the oil and gas industry, chemical plants and other companies urged the Senate Revenue and Fiscal Affairs Committee not to shrink the sales tax breaks they receive from the state.

That prompted a blistering rebuke from several senators who said businesses were pushing higher sales taxes on consumers to try to protect their favored tax breaks.

Sen. Jay Luneau, D-Alexandria, said people who live in his district were floored to learn that Louisiana pays out more in tax breaks to companies than it receives in business tax revenue.

"Come to the table with some solutions," Luneau said. "You're just telling us, 'We can't pay anymore.'"

Stephen Waguespack, president of the Louisiana Association of Business and Industry, said the tax changes under consideration could harm companies and make it difficult for them to stay competitive in a state described as being in its own recession.

"It is a soft and fragile economy," Waguespack said.

The friction came in the waning hours of a special legislative session that must end by 6 p.m. Wednesday.

Gov. John Bel Edwards called the 25-day special session to close gaps in Louisiana's budget estimated to reach $900 million this year and to top $2 billion in the fiscal year that begins July 1.

Lawmakers have agreed to patchwork financing and spending reductions. But they have not agreed on enough taxes to fill the remaining holes, leaving colleges and health services at risk of steep cuts. Lawmakers are about $120 million to $200 million short of rebalancing this year's budget and even further away on balancing next year's spending plan.

House Republicans have bottled up many of the Democratic governor's proposals, and senators who are more open to the tax suggestions are constrained because most tax bills must start in the House.

Edwards met with House Republican leaders late Monday night to discuss possible areas of compromise, hoping to strike a deal without cratering the budget.

"They are making some movement, but nothing's set in stone yet," Edwards spokesman Richard Carbo said Tuesday.

With a limited set of bills to consider from the House, senators said business groups were trying to kill the few options they had available to them for balancing the budget.

"What do you recommend that we do in the next 32 hours?" said Sen. Karen Carter Peterson, D-New Orleans.

Lawmakers on the committee objected to suggestions from Waguespack and others that the House and Senate should consider a sales tax increase higher than the 1 percent tax hike that has received backing from both chambers.

The idea of a higher sales tax increase has been embraced by House GOP leaders, but faces criticism from Democrats who said it would too heavily hit the poor.

Despite the business concerns, the Senate Revenue and Fiscal Affairs Committee advanced the House-backed proposal by Rep. Jay Morris, R-Monroe, to reduce tax cuts that businesses get for their utility costs and their equipment purchases, among other changes.

But before they sent the bill to the full Senate for consideration, committee members — both Republican and Democrat — agreed to boost the bill's hit to business.

As passed by the House, the bill would have stripped off exemptions from 1 percent of the state's 4 percent sales tax. The Senate committee voted to remove the exemptions from all 4 percent of the sales tax.

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Follow Melinda Deslatte on Twitter at http://twitter.com/melindadeslatte

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