(The Center Square) — A measure to phase out a temporary 0.45% sales tax ahead of a scheduled sunset in 2025 cleared the Louisiana House this week.

The House approved House Bill 438, sponsored by Rep. Tony Bacala, R-Prairieville, with a mostly party line vote of 67-30 to address the temporary 0.45% sales tax that's set to expire in mid-2025, resulting in the loss of about $420 million in revenue.

"We have a reckoning ahead. What do we do when that cliff hits, and it's going to be a significant cliff," Bacala said on Monday. "What this bill does is starts to gradually reduce the revenue … to make that cliff less difficult to maneuver.

"Quite frankly, doing nothing is kicking the can down the road and saddling the next governor and Legislature with a burden that will be difficult to overcome unless we prepare now," he said.

Rep. Beau Beaullieu, R-New Iberia, highlighted legislation he sponsored to cut the state income tax that's scheduled for a hearing in the Ways and Means Committee next week, and questioned whether "there would be a greater appetite" for HB 438 or an income tax cut.

"The only way your bill would work is if we make the 0.45 permanent, I think," Bacala said. "So why wait till 2025, if we're going to make this permanent let's do it and we don't have to fight through it."

"This is something we have to make a decision about, and would rather start planning for it now than have it hit us in the face like a baseball bat in 2025," he said.

HB 438 initially proposed to cut the tax to 0.35% starting with the upcoming fiscal year, but Bacala amended the legislation in committee to postpone the reduction until the following fiscal year. The bill as presented on the floor would cut the rate to 0.30% in July 2023, then to 0.15% in July 2024.

Rep. Sam Jenkins, D-Shreveport, questioned whether the reduction would necessitate cuts in the budget, and why Bacala wants to begin to reduce revenue ahead of the scheduled sunset.

"It seems to me we're putting ourselves in a position to begin now to start making cuts," he said. "I do think everything needs to be on the table. We need to look at all the alternatives to our financial situation. A lot of work has gone into taking us from a $1 billion deficit from previous administrations to the ability we now have and I'd just hate to see us rush into something without consideration of all factors, including what may have to be eliminated and what may have to be cut."

"I think it's the smart plan to start weaning ourselves off of revenue before we lock ourselves in and become addicted to revenue that we're not going to have long term," Bacala said.

Bacala repeatedly stressed that it's unlikely the Legislature can muster the two-thirds majority needed to extend the temporary 0.45% sales tax.

Rep. Larry Frieman, R-Abita Springs, suggested that phasing out the temporary sales tax is more fiscally responsible than reducing the income tax, as the former will go away in only a few years. He also noted that reducing the temporary tax at a time when the state has a budget surplus makes sense to avoid budget cuts in the future.

Other lawmakers questioned whether a better approach to weaning off the temporary tax would be to treat the revenues from it as nonrecurring, and to spend the $420 million a year it generates on paying down unfunded liabilities or on infrastructure projects.

"Ultimately in discussion with a lot of members, most people felt like the most prudent thing to do was let's just take the bull by the horns and start reducing this tax in anticipation of its expiration," Bacala said.

HB 1018, sponsored by Rep. Rick Edmonds, R-Baton Rouge, would have diverted the temporary tax revenues from the general fund to a fund dedicated to bridge projects in Lake Charles and Baton Rouge. HB 1018 was voted down by the House Committee on Appropriations on Monday.

HB 438 now moves to the Senate for consideration.