Update on the (State Tax Reform) Special Session 

The special session on tax reform was quite uneventful for engineers until literally the last day. I say the session was uneventful because professional engineering services were not included in the sales tax bill that expanded the list of products and services the sales and use tax would apply to in the future. Engineering services and the digital reports and designs we create were specifically excluded from the taxable digital product bill as well. However, the failure of these bills to generate the revenue needed to offset the tax cuts passed forced legislators and the Governor to look at other funding sources, like the Vehicle Sales Tax revenue, to fill the gap left. 

Once we knew the sales tax bills were in trouble, we began to hear that directing the Vehicle Sales Tax (VST) back to the general fund was one of the only viable options to replace lost revenue. As many of you know, passing legislation in the 2021 legislative session that redirected VST revenue to the Transportation Construction Subfund was a monumental win for ACECL and our industry partners and resulted in the largest reoccurring revenue investment in transportation in three decades. Considering the years of work that went into this effort, we expressed our opposition to reversing course on this major accomplishment.

To ease our concerns, both the Governer and legislative leadership assured us that directing the VST back to the State General Fund (SGF) would only be for two years and those funds would revert back to the Construction Subfund in fiscal year 2027-2028. Because the Calcasieu Bridge project is bonded and underway, $40 million annual allocation to this project from the VST will continue without interuption. Further, to help fill the gap in transportation funding this move will create, legislative leadership have also committed to funding transportation over this two-year span with one-time dollars that will likely exceed revenue generated from the VST. The amendment redirecting the VST is copied below for your review.

Though it was disappointing to see the work of this organization and our members reserved, our concerns did not fall on deaf ears. In addition to assurances detailed above, Governor Landry issued the following statement to Senators and Representatives in advance of the amendment vote on the Senate Floor confirming his commitment to funding transportation, specifically the mega-projects named in the original VST bill.

"Senate President Henry, Speaker of the House Devillier, and I have committed to the people of Louisiana that we will ensure the necessary funding to finish I-49 North, I-49 South, the Calcasieu River Bridge, and the Baton Rouge Bridge." - Govenor Jeff Landry