Sweeping tax overhaul in Louisiana hits snag on sales tax expansion

News

Sweeping tax overhaul in Louisiana hits snag on sales tax expansion

2024-11-15 10:34 Last Updated At：10:40

BATON ROUGE, La. (AP) — Louisiana lawmakers on Thursday postponed a vote on a key bill in Gov. Jeff Landry's sweeping and complex tax reform package.

Most of Landry's proposed bills, granting approximately $2 billion in income and corporate tax cuts, have moved smoothly through the House of Representatives during the state's third special legislative session of the year. But lawmakers have raised more resistance to a sales tax on dozens of services such as lawnmowing, getting tattoos and using coin-operated laundry machines.

Tabling the bill, which would have raised an estimated $500 million to plug the revenue hole created by the tax cuts, raises questions about whether Landry and his allies have rounded up enough support. The GOP-dominated House requires 70 of its 105 members to vote in support of the bill.

“I think the bill is on life support if it isn’t dead already,” said Republican Rep. Joe Stagni.

Exiting the House chamber on Thursday evening, Landry denied there were not enough votes to pass the bill.

“Don’t ever go in the kitchen halfway through the meal being cooked, judge it once it’s cooked," Landry said.

Rep. Julie Emerson, who is responsible for several of the tax reform bills, said some of her colleagues were opposed outright to the entire bill increasing taxes on services, while others had issues with specific services being taxed.

In committee hearings, lobbyists have argued the proposed services to be taxed, including for property repairs and maintenance, would raise costs for small businesses and elevate insurance rates.

But House lawmakers voted 71-23 to make a temporary 0.40% sales tax increase permanent. Lawmakers shaved off 0.05% to bring the state’s proposed overall sales tax rate down to 4.40%. They also planned to repeal dozens of tax breaks, but would keep household groceries from being taxed.

That sales tax expansion would raise around $820 million in annual revenue.

“With a sales tax, a person has a choice," said Republican Rep. Mark Wright, who sponsored the increased sales tax bill. “With an income tax, there is no choice.”

Some fiscal conservatives have indicated opposition to levying new sales taxes on services, with a small group of Republicans voting against making the sales tax increase permanent.

A group of Democratic lawmakers have also argued that the sales tax expansion will weigh more heavily on lower-income households.

Louisiana’s tax system is one of the most regressive in the nation, with lower-income families paying a higher percentage of their earnings toward income and sales taxes than wealthier households, according to research from the left-leaning Institute on Taxation and Economic Policy. A study funded by a coalition of non-partisan economic policy groups found the proposed reforms would make the existing system modestly more progressive, but did not factor in potential increases in local sales taxes.

Landry has said the tax reform is modeled after policies adopted by states like North Carolina and Texas, which he says are out-competing Louisiana economically. He has said passing the tax reform package will make the state more attractive for job-generating businesses, and his allies point out that the Tax Foundation, a conservative think tank, currently ranks Louisiana as 40th in terms of tax competitiveness.

Some lawmakers have questioned whether the proposed taxes on numerous services can be effectively enforced.

Republican Rep. R. Dewith Carrier, representing several southwest Louisiana parishes, said in a committee hearing on Nov. 13 that he did not believe his constituents would fully comply with the new sales taxes.

“Don’t count on my district to do it, them boys they take cash, they’ll trade it for a fifth ... of vodka or food stamps,” he said.

On Wednesday, the House passed a bill to reduce corporate income tax from a 7.5% to 3.5% flat rate and another to add new taxes on digital goods and services like online streaming sites, expected to bring in around $40 million a year. They have also passed bills to eliminate the 0.275% corporate franchise tax — worth more than $500 million in annual revenue — and to flatten the individual income tax to 3%, costing the state approximately $1.3 billion in revenue.

The House is scheduled on Monday to vote on the tabled proposal to expand sales taxes to dozens of services.

Brook is a corps member for The Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues. Follow Brook on the social platform X: @jack_brook96

Thousands of nurses go on strike at several major New York City hospitals

NEW YORK (AP) — Thousands of nurses in three hospital systems in New York City went on strike Monday after negotiations through the weekend failed to yield breakthroughs in their contract disputes.

The strike was taking place at The Mount Sinai Hospital and two of its satellite campuses, with picket lines forming. The other affected hospitals are NewYork-Presbyterian and Montefiore Medical Center in the Bronx.

About 15,000 nurses are involved in the strike, according to New York State Nurses Association.

“After months of bargaining, management refused to make meaningful progress on core issues that nurses have been fighting for: safe staffing for patients, healthcare benefits for nurses, and workplace violence protections,” the union said in a statement issued Monday. “Management at the richest hospitals in New York City are threatening to discontinue or radically cut nurses’ health benefits.”

The strike, which comes during a severe flu season, could potentially force the hospitals to transfer patients, cancel procedures or divert ambulances. It could also put a strain on city hospitals not involved in the contract dispute, as patients avoid the medical centers hit by the strike.

The hospitals involved have been hiring temporary nurses to try and fill the labor gap during the walkout, and said in a statement during negotiations that they would “do whatever is necessary to minimize disruptions.” Montefiore posted a message assuring patients that appointments would be kept.

“NYSNA’s leaders continue to double down on their $3.6 billion in reckless demands, including nearly 40% wage increases, and their troubling proposals like demanding that a nurse not be terminated if found to be compromised by drugs or alcohol while on the job," Montefiore spokesperson Joe Solmonese said Monday after the strike had started. "We remain resolute in our commitment to providing safe and seamless care, regardless of how long the strike may last.”

New York-Presbyterian accused the union of staging a strike to “create disruption,” but said in a statement that it has taken steps to ensure patients receive the care they need.

"We’re ready to keep negotiating a fair and reasonable contract that reflects our respect for our nurses and the critical role they play, and also recognizes the challenging realities of today’s healthcare environment,” the statement said.

The work stoppage is occurring at multiple hospitals simultaneously, but each medical center is negotiating with the union independently. Several other hospitals across the city and in its suburbs reached deals in recent days to avert a possible strike.

The nurses’ demands vary by hospital, but the major issues include staffing levels and workplace safety. The union says hospitals have given nurses unmanageable workloads.

Nurses also want better security measures in the workplace, citing incidents like a an incident last week, when a man with a sharp object barricaded himself in a Brooklyn hospital room and was then killed by police.

The union also wants limitations on hospitals’ use of artificial intelligence.

The nonprofit hospitals involved in the negotiations say they’ve been working to improve staffing levels, but say the union’s demands overall are too costly.

Nurses voted to authorize the strike last month.

Both New York Gov. Kathy Hochul and Mayor Zohran Mamdani had expressed concern about the possibility of the strike. As the strike deadline neared, Mamdani urged both sides to keep negotiating and reach a deal that “both honors our nurses and keeps our hospitals open.”

“Our nurses kept this city alive through its hardest moments. Their value is not negotiable,” Mamdani said.

State Attorney General Letitia James voiced similar support, saying "nurses put their lives on the line every day to keep New Yorkers healthy. They should never be forced to choose between their own safety, their patients’ well-being, and a fair contract.”

The last major nursing strike in the city was only three years ago, in 2023. That work stoppage, at Mount Sinai and Montefiore, was short, lasting three days. It resulted in a deal raising pay 19% over three years at those hospitals.

It also led to promised staffing improvements, though the union and hospitals now disagree about how much progress has been made, or whether the hospitals are retreating from staffing guarantees.