Fiscal Cliff Agreement Unlikely Before Friday
Reports indicate that it is increasingly unlikely that House legislators and Governor John Bel Edwards will come to a fiscal cliff agreement before a Friday deadline. The deadline was set by the Governor, who was hoping to enter into a February special session with an agreement in principle to fill the one billion dollar budget shortfall. Edwards says delaying the fiscal cliff decision could be damaging.
“It just adds to the instability, it’s going to get credit agencies to cast a negative eye on Louisiana which costs us more money to service the debt we already have.”
The shortfall is due to the expiration of a one cent sales tax that was passed two years ago to salvage the budget. Edwards says the sales tax increase was not a long term fix.
“The reason they did a short term approach was to be able to do long term structural reform and so now its past time to get it done.”
The GOP is requesting a budget with less spending, while the governor wants to replace the sales tax by eliminating certain business tax breaks. Edwards says a key piece of these negotiations is getting his tax reform plan passed…
“We currently have the highest state and local sales tax in the country and I don’t think it’s a good idea to be an outlier in any tax type.”