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Sliver of penny may separate Special Session success from failure

"We have to get something done."

BATON ROUGE — One-tenth of a penny could be the gap that separates success from failure during the Special Session to address Louisiana's budget crisis.

Gov. John Bel Edwards is asking lawmakers to raise more than $500 million in taxes to address a looming $648 million shortfall in next year's budget through a half-cent sales tax and the elimination of some industry sales tax breaks.

But Republicans in the House may be coalescing behind a bill that would raise a 0.4-cent sales tax with the elimination of some industry tax breaks that would raise just under $500 million.

Rep. Paula Davis, R-Baton Rouge, said she believes her 0.4-cent sales tax bill she plans to file Tuesday could reach the "sweet spot" for compromise.

She said her bill is backed by Republican House Speaker Taylor Barras, R-New Iberia, who will co-author the bill.

"We have to get something done," said Davis, who voted against both a one-third cent sales tax and one-half cent sales tax in the previous Special Session where the House rejected both bills. "Hopefully this is a compromise that can be embraced by members."

But lawmakers like Rep. Terry Landry, D-New Iberia, don't believe the 0.4-cent sales tax is enough.

Rep. Terry Landry, D-New Iberia, is carrying a bill that would add a half-cent sales tax to address the state's budget crisis. Greg Hilburn/USA Today Network

Landry's House Bill 2 would stick with the one-half cent and raise $507 million, though it didn't make it out of committee during the last Special Session.

"We talking about one-tenth of a percent to fund our critical needs," he said. "So what's the problem? If it's not partisanship, what is it?"

Some Republicans feel the same way.

Rep. Kenny Havard, R-St. Francisville, has filed House Bill 3 that mirrors Landry's.

"Why would you vote to raise taxes and not raise enough to avoid cuts?" Havard said.

Another option by Republican Rep. Stewart Bishop, R-Lafayette, would raise a half-cent sales tax for three years, drop it 0.4-percent then to .25-percent before rolling off completely in 2025. Bishop's bill wouldn't eliminate tax breaks for industry, so it would raise $453 million.

"We haven't seen any other instrument so far that could reach 70 votes (in the House)," said Sen. Rick Ward, R-Baton Rouge, who stood in Tuesday for Bishop, who was ill and absent.

But others are wary of more temporary measures. "My concern is it sets us up for another fiscal cliff," said Rep. Ted James, D-Baton Rouge, of Bishop's bill.

Davis said her bill would both shrink government and avoid catastrophic cuts.

Among the casualties if no new taxes are raised: TOPS, the state's popular college scholarship program; senior centers; National Guard armories; food stamps; and the pre-kindergarten program.

"My bill will fund our critical services while making strategic cuts to government," Davis said.

But it's unclear whether any part of the penny — one-third, one-half or four-tenths — can reach 70 votes in the House or even clear the House Ways & Means Committee, where members of that panel will vote on the tax bills Wednesday.

While Republicans may embrace Davis' 0.4-percent, Democrats and a few Republicans could balk and too many Republicans are likely to reject one-half cent.

Meanwhile, Rep. Jay Morris, R-Monroe, plans to file a wildcard bill that would raise about $173 million by eliminating 70 to 80 sales tax breaks for industry that are set to return July 1.

"If a plumber or T-shirt shop buys equipment they have to pay 4 percent sales taxes, whereas a petrochemical plant pays zero percent," Morris said. "That's not necessarily fair."

Morris' bill would dedicate the money to TOPS, the district attorneys, the developmentally disabled and higher education.

"I wouldn't count on anything passing," Havard said.

And that would be fine with anti-tax lawmakers like Rep. Blake Miguez, R-Erath.

"I'm voting to protect the taxpayers, which means I'm not voting for any new taxes," Miguez said.

Greg Hilburn covers state politics for the USA TODAY Network of Louisiana. Follow him on Twitter @GregHilburn1

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