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Edwards agrees to bill adding up to $300M yearly to roadwork

July 2, 2021 GMT

BATON ROUGE, La. (AP) — Louisiana will shift up to $300 million in taxes charged annually on the sales of new cars and trucks to roadwork, under a bill Gov. John Bel Edwards announced Friday he signed into law, handing a victory to Senate leaders who pushed for the boosted transportation funding.

The dollars will be removed from the state general fund where they help to pay for health care, education, public safety services and other government operations. The shift will be phased in over two years starting in mid-2023, with some provisions for cutting the size of the transfer if the state faces budget gaps. A specific list of road and bridge work will be prioritized for the money.

Edwards’ decision on the measure — which was passed on the final day of the regular session earlier this month — had been uncertain. The Democratic governor had expressed concern about creating budget gaps across state services by reshuffling the vehicle sales tax money to road and bridge work.

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But Senate President Page Cortez and other GOP Senate leaders argued the state needed to do more to bolster transportation funding and chip away at a multibillion-dollar backlog of infrastructure work.

They initially proposed stripping the expiration date for a temporary state sales tax and sending the nearly $400 received annually from the 0.45% tax to roadwork, but that faced sizable opposition in the House and was unable to pass. So senators turned their focus to the existing vehicle sales tax and added that provision into an unrelated bill by Houma Rep. Tanner Magee, the House’s second-ranking Republican who supported the rewrite.

The Senate unanimously supported the vehicle sales tax shift, while House lawmakers voted 88-13 for the measure.

While legislative leaders were pleased with Edwards’ signature on the highly sought bill, that is not likely to end the drumbeat for a mid-July veto session for lawmakers to consider overturning the governor’s rejections of other measures that won strong bipartisan support.

Certain projects are specifically given priority for the new transportation funding, such as replacement of the Interstate 10 bridge in Calcasieu Parish, expansion of I-49 in the southern part of the state, a new Mississippi River bridge in Baton Rouge, widening of I-12 from Baton Rouge to the Mississippi state line, widening of I-10 in the New Orleans area and improvements around I-20.

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Opponents argued that shifting existing tax collections, rather than raising new revenue, will put funding for public colleges and health care programs for the poor and disabled at risk. But supporters argued the state will see enough revenue growth to make up the difference. Plus, they said the state can’t delay addressing crumbling roads and bridges and needed expansions any longer.

Adam Knapp, head of the Baton Rouge Area Chamber, praised the bill signing as making Louisiana’s first “serious, long-term investment in its infrastructure” in decades.

“With this rededication of dollars, Louisiana can begin to build back its infrastructure to compete for the jobs and talent that depend on it,” Knapp said in a statement.

The bill will move 30% of vehicle sales tax collections — an estimated $148 million — to transportation projects in the 2023-24 budget year. That will double to 60% in the following year and each year after that, with estimates that will steer $260 million to nearly $300 million annually to roadwork.

The fund shift will drop to $150 million if the state sees significant budget gaps.

In separate legislation, lawmakers also allocated $560 million in federal coronavirus aid to pay for infrastructure, including several phases of widening of Interstates 10, 12 and 20, port projects and work on I-49 South.

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The bill is filed as House Bill 514.

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Follow Melinda Deslatte on Twitter at http://twitter.com/melindadeslatte.