A task force spent 2016 studying the tax system, issued a comprehensive set of recommendations in January and warned that “a failure to act is not an option.”
The Louisiana Legislature opted not to act.
The last chance to carry out proposals modeled on the panel’s recommendations during the 60-day regular session met a quiet death Saturday in a Senate committee room in the State Capitol’s basement.
Members of the Senate Revenue & Fiscal Affairs Committee lamented their opposition to income tax measures brought by state Rep. Julie Stokes, R-Kenner, and state Rep. Barry Ivey, R-Central. They said they had no other choice after the Louisiana House killed virtually all of the other ideas recommended by the 13-member panel. Making piecemeal changes, the senators said, wouldn’t help the much-lamented tax system.
“That massive reform that was supposed to happen this year has not happened,” state Sen. JP Morrell, D-New Orleans and the committee chairman, told his colleagues in comments that three others echoed.
A profusion of tax breaks and giveaways in Louisiana’s tax code means tax rates are too high…
The next chance to carry it out would be in the special session that Gov. John Bel Edwards will be forced to call within the next 12 month to deal with the state’s looming budget deficit.
The Louisiana Legislature won’t provide a long-term fix for the state’s continuing budget pr…
“But if we can’t get it done now, we won’t get it done in a special session,” Ivey said in an interview after the committee hearing ended.
Stokes and Ivey sought the committee’s approval to give voters the chance to replace the current graduated income tax system with flat rates coupled with individuals and corporations giving up the provision allowing them to deduct their federal tax payments on their state tax returns. Stokes noted that only three other states permit such a deduction, and this was a reason why the task force called for eliminating it.
“This would be a small step to setting Louisiana on a better trajectory,” Stokes said.
Voters would be given the opportunity to establish flat income tax rates for individuals and…
The House narrowly passed these proposals 10 days ago after initially resisting them.
Stokes and Ivey proposed a flat 3.76 percent rate for individuals and a 6.5 percent rate for corporations. Both rates would be lower than the top individual and corporate rates currently and would be revenue neutral, they said, calling it “conservative” tax policy.
But after Stokes made her presentation, Morrell uttered what have increasingly become the dreaded words during the legislative session. “I appreciate your hard work,” he began, noting that Stokes and Ivey have devoted countless hours to offering proposals that would qualify as reform under the task force’s rubric. Indeed, just minutes earlier, the committee approved House Bill 673 by Stokes that would better align sales tax exemptions offered by state and local governments.
But then Morrell told Stokes that he couldn’t support the income tax changes because they weren’t part of a more comprehensive package.
State Sen. Gerald Boudreaux, D-Lafayette, state Sen. Karen Carter Peterson, D-New Orleans, and state Sen. Dale Erdey, R-Livingston, offered similar comments.
“We have to collectively come together and turn this state around,” Erdey said.
Peterson, who chairs the state Democratic Party, offered barbed comments at the Republican-majority House.
“It’s a continuation of the foolishness on the other side,” she said. “They need to get their act together.”
Morrell was also caustic after the committee hearing adjourned.
“The House cherry-picked the things they liked,” he said. “This committee was not willing to along with the cherry-picking.”
Revenue Secretary Kimberly Robinson, who co-chaired the task force, said afterward that the Gov. John Bel Edwards and his team will continue to push for a tax overhaul.