BATON ROUGE, La. (AP) — Louisiana lawmakers returned to the state Capitol on Wednesday for their third special legislative session of the year, this time with a focus on tax reform.

As the state faces an estimated budget hole of more than $700 million next year, largely due to the expiration of a temporary .45% sales tax and a tax on business utilities, Gov. Jeff Landry is urging the GOP-dominated Legislature to overhaul the state’s tax structure. His reforms call for retaining this sales tax and allowing the business utilities tax to expire. But he is pushing for far more sweeping constitutional amendments that would require voter support in statewide elections scheduled for March.

Among the governor’s proposals is the flattening of income and corporate tax rates. To offset those revenue losses, Landry is proposing extending the sales tax to other services and digital goods, such as Netflix, lobbying, dog grooming and car washes.

Landry also seeks to merge two state trust funds holding nearly $3.8 billion dollars combined. Less money would be channeled to the state’s savings account under this proposal and more money from corporate tax and mineral revenue would be at the disposal of lawmakers to spend, according to an analysis from the Public Affairs Research Council, a nonpartisan Louisiana think tank.

Additionally, there are plans to remove dozens of tax breaks, including for the state’s film industry and for rehabilitating historic structures. Supporters believe the changes to corporate and income taxes will attract businesses and keep the state competitive with its neighbors as Louisiana battles outward migration.

Currently, there are 223 sales tax exemptions, Richard Nelson, Secretary of the Department of Revenue, said.

“I would say the tax code is one of the major drivers of why Louisiana fails to get ahead,” Nelson said at an Aug. 30 panel on the tax reforms.

Democrat Minority Leader Matthew Willard said at the same panel that he was not convinced that flattening individual income tax would improve the state’s economic outlook and feared it would increase the state’s deficit.

According to information from the state’s Department of Revenue, Louisiana residents currently pay a 4.25% tax rate on income $50,000 and above, 3.5% on income between $12,500 and $50,000, and 1.85% on income $12,500 and below. Landry’s proposal would eliminate income tax for those making up to $12,500 and would set a flat income tax rate of 3% of those earning above $12,500.

There are nine states that do not levy an individual income tax. Among those are the nearby states of Florida, Tennessee and Texas.

The vast majority of Louisianians will see significant tax cuts following the proposed changes to state income and sales taxes, according to an analysis conducted by the state legislator’s longtime former chief economist and funded by a coalition of nonpartisan public policy groups. A little over 1 million households would see their state-level taxes reduced by 20%, the study found.

The reform package would eliminate the corporate franchise tax and ultimately reduce taxes on corporate income tax to a flat rate of 3.5%. Currently, the state applies a 7.5% tax rate to corporate profits exceeding $150,000, a 5.5% rate to profits between $50,000 and $150,000, and a 3.5% rate to profits below $50,000.

Skeptics have expressed concern that the proposed reforms would grant overly generous tax cuts to corporations.

“It’s small business subsidizing big business, is basically what it is, and that’s not right,” said State Senator W. Jay Luneau, a Democrat, at an Oct. 24 Senate hearing.

Lawmakers from both sides of the aisle also stressed that they want to ensure local parish governments do not lose revenue they rely on as a result of the tax overhaul. The proposed changes would incentivize local governments to eliminate property taxes on business inventory and end local taxes on prescription drugs and incentives.

Nelson, the Department of Revenue secretary, said the proposed change would prevent citizens from being taxed for medical needs and instead shift their taxes to consumer services such as landscaping.

“My neighbors are going to crucify me” in response to proposed taxes on lawn-mowing services, said Republican Senator Stewart Cathey, Jr.

Other lawmakers noted there will likely be stiff opposition from numerous special interest groups set to lose their longstanding tax breaks. And they have questioned whether a special session in the aftermath of the national election would be enough time for lawmakers to fully process and debate massive policy changes.

Daniel Erspamer, CEO of the Pelican Institute, a conservative think tank, said the need to simplify the state’s tax code has been a long time in coming and applauded the attempt to confront the issue.

“I’m pleased that the governor really said, you know, let’s put our money where our mouth is and get this thing done,” Erspamer said. “We’ll see how the Legislature feels about that.”

While Landry has framed the session as tax-focused, his session call proclamation had 23 items listed — including teacher pay and a possible reworking of the state court system.

The special session will begin at 3 p.m. Nov. 6. Landry is scheduled to speak to the Legislature on the opening day. The legislative gathering must conclude no later than 6 p.m. on Nov. 25.

Louisiana voters approved an amendment asking them if revenues from offshore alternative energy should go towards coastal restoration and protection.

Federal money from offshore oil and gas production already goes into Louisiana’s Coastal Restoration and Protection Fund. “We’ve received hundreds of millions of dollars over the years because of that. What this amendment would do is basically the same,” Barry Erwin, president and CEO of Council for a Better Louisiana, told Louisiana Considered. 

Despite these oil and gas revenues flowing into the fund, the state doesn’t have enough money to fund its Coastal Master Plan. Amendment 1 sets up the state to receive slightly more.

The yes vote on the amendment means federal money from the emerging offshore alternative energy industry, which is primarily wind, will go into that same fund for the coast. A no vote would have put the money into the state’s general fund, which is spent how the legislature chooses.

There are no completed wind projects off of Louisiana’s Gulf coast yet. Two were granted leases by the state last December and are underway. The Danish firm Vestas – which operates under the name Cajun Wind in Louisiana – was granted nearly 60,000 acres off of Cameron Parish. Diamond Wind, which is owned by the Japanese company Mitsubishi, was granted a little over 6,000 acres of the coast of Terrebonne and Lafourche parishes.

The federal government doesn’t share offshore alternative energy revenues with states, but some in Louisiana’s congressional delegation have been pushing for it. Sen. Bill Cassidy co-sponsored the Reinvesting in Shoreline Economies & Ecosystems (RISEE) Act and Rep. Steve Scalise sponsored the Budgeting for Renewable Electrical Energy Zone Earnings Act (BREEZE Act), both of which would bring revenues from offshore wind to states.

But Erwin said even if revenues start coming in, it won’t be very much money. Estimates put the amount at about 10 percent of what Louisiana gets from oil and gas, which is about $160 million a year. “We’re gonna be losing a lot of the coastal money that we’re getting right now when the BP oil payments are kind of finalized in a few years,” he said. “So I think the proponents feel like every dollar that we can still muster towards coastal protection.”

BASILE, La. – An EF-1 tornado injured three people when it struck near Basile, Louisiana, Tuesday morning, according to the National Weather Service.

The NWS noted the twister had estimated peak wind speeds of 95 mph, with a path that was 1 mile long and 150 yards wide.

The tornado touched down along U.S. Highway 190 west of the town of just over 1,200 people.

Basile Mayor Mark Denette said three people were sent to the hospital for assessment and treatment. 

He added that the tornado caused extensive damage to a local grocery store called Rhea’s Specialty Meats and expressed his condolences to the store owner, Jude Burton.

“Prayers for Jude, his family, and his staff as his place of business is a very important part of Basile,” he said in a Facebook post.

Other storm damage included downed trees and damage to an RV, Denette said. 

A tornado was also spotted near the town of Maurice, which lies southeast of Basile, the NWS said.