BATON ROUGE — The Louisiana Chemical Association (LCA) is proceeding with a lawsuit to challenge a shift in the state’s tax laws that are designed to raise tens of millions of dollars to help balance the state budget.

“We have filed a suspensive appeal with the First Circuit Court of appeals,” Rob Landry, the LCA’s manager of Public Affairs and Communications, recently told the Louisiana Record. “At this time, we are not making any other public comments about the suit.”

Judge Mike Caldwell of the 19th Judicial District decided against the LCA in December, ruling that lawmakers properly approved the temporary suspension of a single-cent sales tax exemption on business utilities.

The LCA has argued that suspension of the sales tax exemption was unconstitutional because the measure to suspend did not receive enough votes for passage in the state House of Representatives.

Lawmakers cut down several tax breaks last year to prevent cuts to public health care services and universities. The tax change was expected to raise more than $100 million for the state treasury.

But according to Greg Albrecht, the Louisiana Legislature's chief economist, the tax break suspension hasn't generated as much money as expected. At least $13 million has been paid under protest and is currently being held in escrow, where it cannot be spent.

Louisiana's budget deficit has increased over the past year from $850 million to $950 million.

August marks the expiration of the business utility tax break suspension. Gov. John Bel Edwards, however, is asking lawmakers to consider an even bigger scale-back of the tax break to alleviate the state's financial woes.

The LCA represents companies operating 108 plants across Louisiana. The association hoped to have the suspension legislation declared unconstitutional because it failed to receive support from two-thirds of House lawmakers.

The House and Senate each voted twice to pass the legislation. In both cases, the Senate passed the two-thirds mark for the measure, but the House did not.

Caldwell ruled that the Constitution of Louisiana allows for the suspension of a law with the same number of votes that passed it.

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