Lawmakers Finally Make a Budget Deal

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After a total of seven special sessions since 2016, and three special sessions this year, Governor Edwards and legislators finally wrestled the budget into some type of order by the passage
of an extra .45 percent sales tax, in down to the wire negotiations that ended last week. The move sidesteps drastic cuts to public health and higher education and provides several years
of stability.

The new tax will raise an estimated $463 million to plug holes in the budget hat if left unresolved, had threatened to bring dramatic cuts in health care services and what the Governor called
“a catastrophic cut” to higher education.

The new sales tax, a partial renewal of an expiring one percent sales tax, is said to give the lawmakers some respite from the yearly battles with the budget. The .45 brings the state sales
tax to 4.45.

“The fiscal cliff is now gone and we have predictability ahead of us,” the Governor said after the agreement passed in this year’s third special session.

In the special sessions lawmakers were attempting to deal with the state’s budget crisis when more than $1 billion in taxes would expire on June 30, 2018. The two earlier special sessions
floundered after the House repeatedly rejected increased taxes. The House passed a budget that made dramatic cuts to TOPs, universities and state agencies, and then that was vetoed by
the Governor.

Allowing the new arrangements, this week Moody’s Investors Service changed Louisiana’s rating to “stable.”

Gov. John Bel Edwards said, “Today’s action by Moody’s validates what we’ve been saying about the need for budget stability,” said Gov. Edwards.

“Thanks to the bipartisan compromise achieved during the last special session, Louisiana is no longer on the negative watch list. By working together, for the first time in a long
time, Louisiana’s budget will have the kind of stability and predictability we need to bring new business opportunities to our state and grow our economy. As a result, not only are the
credit rating agencies taking notice, but we are positioned to generate greater savings for our state that will enable us to continue on our path toward prosperity.”

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