Hammett: Governor played large role in special session’s success

Published 12:00 am Wednesday, March 31, 2004

Kathleen Blanco’s first special session as governor came out a success as she almost got everything she wished for, said state Rep. Bryant Hammett, D-Ferriday.

Blanco played a large role in the special session she called to address mainly three major tax issues &045;&045; making some temporary taxes permanent and phasing out two taxes on business.

&uot;The governor played a huge personal role in this process which is unusual,&uot; Hammett, chair of the Ways and Means Committee said.

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&uot;I just think it turned out very very positively for state of Louisiana and her administration to make such a positive step with her first session.&uot;

Hammett said the legislators appreciate Blanco’s involvement and want to see more of it, but he sees her continuing that role.

&uot;She’s a pretty hands-on kind of person,&uot; Hammett said.

&uot;I think she is going to have to stay actively involved to get her agenda for Louisiana&uot; passed.

The regular session begins March 29.

The governor began her tenure with what Hammett called an &uot;ambitious agenda&uot; for the special session.

After a little tweaking, the state House of Representatives and Senate compromised and approved all three of her proposals, just not all to her first specifications.

Blanco wanted to make permanent an 18-year-old temporary tax on business utilities that brings in about $160 million to the state per year.

With natural gas prices already high right now, putting a 2.8 cent tax permanently on that was maybe just too much, Hammett said, thinking if the natural gas prices were lower the tax would have gotten permanency.

Instead, the compromise was to renew it for five years instead of the two years previously set.

&uot;Gov. Blanco would have liked to see it go permanent,&uot; Hammett said, so the state could use the funds for more long range budget planning.

But, at five years will help instead of the two, he said.

&uot;I think five years was an adequate compromise,&uot; Hammett said.

&uot;I don’t think the state is ever going to be in a fiscal posture where they won’t be able to renew those taxes.

&uot;I don’t think you will ever not see those not renewed,&uot; he said, and that is why is seems &uot;ludicrous not to make (them) permanent.&uot;

The other two large tax proposals were to phase out two business taxes within eight years.

The phase out is supposed to be an economic stimulus for more business coming to Louisiana, Hammett said.

Business analysts say the phase out will be offset by a growth in economic activity.

The first tax was a tax on manufacturing machinery and equipment. The second is on manufacturing machinery and equipment.

It started as a seven-year phase out that would not start until next year.

It was modified to start this year instead, but still phasing out in seven years.

But there are attachments.

If the state exceeds revenue projections and there is an influx of money, it will start immediately, Hammett said.

The other tax, a franchise tax that taxes money borrowed to expand a business, will phase out in eight years and start next year.