BREAKING: The Gas Tax Increase Is Dead

We heard this morning from several people in the know that at last night’s meeting of the Louisiana House Republican Delegation, Rep. Steve Carter admitted to the members that HB 632, the gas tax increase bill he’s been trying to drag across the finish line for this entire legislative session, simply does not have the 70 votes required for passage on the House floor.

And shortly thereafter, the Louisiana Association of General Contractors, which had been attempting to rally support for Carter’s gas tax bill, threw in the towel on the gas tax. That association’s CEO Ken Naquin said as much in an e-mail to AGC’s membership…

From: Ken Naquin
Sent: Wednesday, May 31, 2017 10:27 AM
To: LAGC
Subject: Fuel Tax Bill Dead for Session

To: LAGC Highway Division Members

Ladies and Gentlemen:

Yes, the tag line is correct. Rep. Steve Carter will address the House floor today and hang HB 632 up, on the calendar. As of late last night, after an exhaustive full floor lobby, we can only garner 60 yes votes, leaving us 10 short and no one moving.

I want to thank the LAGC membership for the response and reaction to every call-to-arms we made. Many legislators told me they have heard from the AGC members but still could not vote for a fuel tax increase. I want to especially thank Lew Love, Reldon Owens, Steve Hackworth, Terry Baugh and George Wilson for participating in the many coalition meetings we held. DOTD Secretary Shawn Wilson attended every meeting and allowed his staff to work with the coalition. There are a few legislators I like to highlight. Rep. Steve Carter (R), Baton Rouge, the lead author was outstanding. The fight he made with his own party was epic. Rep. Julie Stokes (R), Kenner who stood strong, despite continued, poisonous attacks from the right. Rep. Stokes is running for State Treasurer and she is the only such candidate that supported the fuel tax increase. LAGC will support Ms. Stokes for Treasurer and I encourage all LAGC members to do so also. Look for us to hold a fund raiser for Rep. Stokes sometime soon. The Legislative Black Caucus committed to the tax increase and stayed there.

We have the final tick of how legislators were to vote. That will be our LAGC PAC campaign list for supporters.

Who is the Coalition? What did we do?

You heard me speak of the coalition we were involved with. It included: LAGC, LAPA, CAAL, Consulting Engineers, Ports Authority of La., 31 Chambers of Commerce (not Bossier), Blue Print La., La Good Roads Ass., and several other Economic Development groups. Those that said they were with us but saw no lobbying action: Police Jury Ass., La. Municipal Ass., Organized Labor and airports. Those that should have been with us but stayed neutral: LABI, La. Chemical Ass., and ABC. Although many industrial plants allowed their contract lobbyist to work with us.

We retained a social media consultant to use the Driving La. Forward web site and face book to percolate our weekly message. We also, retained an individual within our lobby to address and comment on social media. Our consultant also was able to generate direct calls from selected legislators district that were “for” the fuel tax increase. Those averaged about 20 daily on 35 legislators. The Build It folks cut a T.V. spot that was shown in Baton Rouge, Lafayette and Lake Charles. We also hired 4 additional lobbyists to assist once we reached the House floor.

What happened? Why were we unsuccessful?

You must appreciate the toxic mix that is the House of Representatives as it exists today and the total lack of leadership in the House. There are in reality 3 Speakers of the House. Taylor Barras (R), New Iberia, elected Speaker, Lance Harris, (R), Alexandria Chairman of the House Republican caucus and Cameron Henry, (R), Metairie, Chairman of the House Appropriations Committee. The power in the House is Rep. Harris. The republicans do not want to allow Governor Edwards any victory, and the passage of an infrastructure bill would be considered his victory. We kept the Governor behind the scenes but he worked the democrats hard. The Legislative Black caucus is fighting the republicans because of the monuments vote. The state is headed for a fiscal cliff next year, is facing a $400 million deficit this year and the House has done zero to address either. Any tax reform introduced, even by the republicans has failed. And let’s not forget Congressman Garrett Graves who took every opportunity he could to derail our efforts.

Five groups opposed the tax increase, Americans For Prosperity (funded by the Koch brothers), the Tea Party, the state Republican Party, Small Businesses and the truckers. We heard that the La. Sheriffs Ass., the city Police and tourism were opposed but saw no appreciable efforts on their part. I will share with you that these groups were vile and venomous in their comments and actions. They threatened, and persecuted those that would vote with us in social media. Twenty-three (23) states have passed fuel tax increases since 2013. AFP and the Tea Party was active in all and the only state that the citizenry bought into their pitch is Louisiana. Too, in all 23 states the truckers supported the fuel tax efforts, but not in Louisiana.

Too, there is an anti-tax environment in Louisiana. Three weeks ago, nine millage renewals were voted down; in St. Tammany, in Lake Charles, in Lafayette, and in Bossier. Not new millage, but renewals. That effected the legislators in those areas big. Some legislators in those areas commented they could vote against the tax increase and if it passed then they would still get their projects. How disingenuous.

In other words we were and are in the perfect storm to do nothing.

Where do we go from here?

There will be a special session. Whenever sales tax is on the table for discussion, we have to be positioned to put infrastructure in that discussion. If sales tax are to remain, if they are to be amended, if they are to be repealed, then infrastructure has to get part of that revenue source. We have already talked with several legislators to be primed to introduced infrastructure into that fray. So, going forward we will be looking for opportunities to do just that.

As someone once said “Keep your powder dry and your aim high”. We will find Louisiana additional infrastructure money.

Ken Naquin
Chief Executive Officer
Louisiana AGC

If the e-mail comes off as bitter, one potential reason why might be that this gas tax bill was Naquin’s swansong. We’ve heard on more than one occasion that his long tenure as the head of AGC is near its end and this was a last hurrah of sorts. Whether that’s true or not we don’t know; whether Naquin is on his way out or not, he certainly poured everything he could into getting the gas tax bill passed and it’s understandable that he would be angry at its failure.

The fact is, though, the public was opposed to the gas tax hike bill, and vigorously so. It might have roped in lots of special interests who either might have benefited from its passage or who believe that road improvements would make for economic development, but the support of the people wasn’t there.

This doesn’t mean that the public doesn’t want the roads improved. As one of Naquin’s members noted in a message to us, perhaps his explanation of why the bill failed could have been changed to something different which might have read as follows…

We ran a bad bill. We should have known the political climate was tax averse and pivoted to a local fuel tax option. Currently, state laws forbids local municipalities from charging a fuel tax. As you well know, DOTD has some significant trust issues with the public, and the perception of giving them increased funding would simply compound the problem. This issue could have been avoided if we would have supported a local fuel tax option, allowing locals to solve local issues, and avoiding the politics of who gets what once the money is in the hands of the state. In addition, we could have easily gotten the votes to pass the local option as many of the groups that were in the opposition have publicly and privately stated they would support us in these efforts. And a special thanks to Congressman Garret Graves, who recently got an additional 100 million dollars of federal money earmarked to infrastructure in Louisiana. Please reach out to Garret and let him know we appreciate his tireless efforts.

There are some interesting implications to the gas tax bill’s failure, which we’ll address in a separate post.

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