State Sen. Ryan Gatti (R-Bossier City) said the upcoming legislative session will be a “bloodbath.”
During a town hall meeting held for local officials at his law offices in Bossier City Thursday, Gatti gave attendees an honest idea of how the upcoming legislative session will unfold.
He said the main battle among legislators will involve where and what to cut in the state budget, particularly when it comes to billions of dollars in business exemptions/industrial tax credits and the inventory tax.
“The latest I heard was that we were looking at a 10-year phase out of the inventory tax and then taking away exemptions,” Gatti said.
“Where do we cut in the state budget that has been cut for 9 years? The inventory tax is a program that has grown from $30 million to $400 million,” he added.
The inventory tax works by taxing businesses’ inventory, the business then pays that money to local governments, and the state reimburses the business. By removing this, it leaves a hole in funding for many local towns and parishes.
“We have to get rid of it. But we need something to backfill the local governments,” said Gatti. “You can’t gut local government’s budgets. They can’t go to the people (to make up the lost money). You can’t always put it on the back of the middle class in rural communities.”
That’s where examining the $5 billion worth of business exemptions comes into play.
Gatti described the program as “TOPS on steroids.” He said he is in favor of a 10-year phase out that would couple with the phase out of the inventory tax.
“You can’t have so many exemptions that the state writes you a check at the end of each year. We’ll give you the credits, you just can’t get a refund. That would’ve funded a lot of the problems we’re facing,” Gatti said.
Other issues the legislature will consider are a gas tax that would go towards repairing the billions of dollars worth of necessary repairs to bridges and roads.
“Some people say it’s five cents all the way up to 27 cents. I’ve had people tell me, ‘If you charge me another 15 cents and promise me good roads, I’ll support it.’ And I’ve had people say, ‘If it’s one penny more, I’m pulling out of the state.’”
He said Gov. John Bel Edwards will call the legislature into a special session next month to solve an expected $300M to $485M shortfall for next year’s budget. He assured the attendees it was not to raise taxes, but instead to “broaden cuts.”
Gatti said the legislature couldn’t keep cutting higher education and healthcare.
“We have to broaden the base and lower the rate,” he explained. “This special session is not to raise taxes, it’s to take the time to figure out where we want to cut.“
Lastly, Gatti said he expects the 1-cent “clean penny” sales tax to go away during this session.
“The 1-cent sales tax was a short term fix and this year is focused on fundamental changes.”
He said the clean penny is expected to have raised as much as “two or three exempted pennies.”
“So you’ll see that penny come off, but you’ll see two or three pennies get cleaned up,” Gatti said.