Lawmakers continue to hammer out budget as deadline nears

Staff Report

BATON ROUGE – Less than one week remains before state lawmakers must present a budget amid deep deficit for the next fiscal year, but tax breaks and tort reform to businesses remain the focus for House Republicans.

The focus among lawmakers looms on legislation that would give tax breaks to riverboat casinos that suffered huge losses during the coronavirus.

The credits come as the state prepares to hammer out a $34 billion spending plan for the next fiscal year, but the tax credits will likely take a chunk out of the budget for next year.

The tax break for casinos, proposed by Lake Charles Republican Sen. Ronnie Johns, slashes $11 million in taxes for the state’s riverboat casinos, as well as slot machines at racetracks and a New Orleans land-based casino.

Johns proposed the bill to boost casinos during the quarantine, which left them shuttered and have since been limited on capacity due to social distancing mandates.

The reduction in the oil and gas severance tax – to the tune of $150 million over the next five years – was introduced by Rep. Phillip Devillier, R-Eunice, as a means to spark a resurgence in drilling. The House gave the green light to the tax cut, but it fizzled in the Senate Revenue & Fiscal Affairs Committee, headed by Sen. R.L. “Bret” Allain, R-Franklin.

Businesses will benefit from a $300 million of the $900 million in federal COVID-19 relief money after Guv. John Bel Edwards signed the bill that allows that portion of the revenue to go to businesses. Edwards originally wanted to funnel all of the money to state and local government.

Louisiana lost nearly $1 billion from the coffers thanks to the pandemic, along with the freefall in oil prices, according to the forecast the Revenue Estimating Conference issued in May

REC projections include a $316 million drop in sales tax revenue, along with a $351 million hit on severance taxes and $172 million less from casino and riverboat gambling.

The downfall leaves the state with $11.5 billion, a tumble from the $12.6 billion figure the REC agreed upon in April 2019.

The $867 million loss deals the state an unexpected blow during a year when lawmakers had hopes that the $500 million surplus last year would allow more flexibility for spending in healthcare, K-12 education, early childhood education and college funding.


Republicans have also sought to counter the governor’s veto on tort reform through bills that would lower auto insurance premiums in Louisiana – the second highest in the nation after Michigan – by imposing limits on the ability for victims of auto accidents to file lawsuits.

The bills by Rep. Ray Garafalo, R-Chalmette, and Speaker of the House Clay Schexnayder, R-Gonzales, include adjustments to the legislation from Rep. Kirk Talbot, R-River Ridge.

Talbot’s proposal would have mandated that judges award damages to injured plaintiffs at 1 ½ percent of the total premiums they paid.

The legislation by Garafalo would decrease monetary amount for an injury but leaves it to the jury – rather than the judge – to determine the worth. It would also ban plaintiffs from filing suits directly against the insurance companies and widen the time frame for parties to settle cases out of court.

The proposal would also allow judges to and juries to ask of the plaintiff wore a seatbelt at the time of the accident.

Garafalo’s bill passed 74-24, which gives it enough votes to override a veto if the governor takes that route.

Schexnayder’s bill, which had less detail, passed 78-22.

In his veto, Gov. Edwards said the legislation does not offer compromise or mandate to lower insurance rates in Louisiana.

“I remain convinced that if we are truly going to reduce insurance rates,” Edwards said, “we need to confront all of the underlying factors that lead to high insurance rates, such as distracted driving, poor road and bridge infrastructure, and discriminatory practices on credit rating and gender that lead to more uninsured or underinsured drivers.”