The Louisiana Senate derailed an effort Tuesday to repeal the state’s $5.7 billion personal and corporate income tax.
Instead of voting to phase out over a decade a major revenue source for state services, the Senate opted to study the issue.
The heavily amended Senate Bill 259 goes to the House, where it could be reworked once again.
Separate legislation to repeal the state personal income tax already is on the House calendar.
The SB259 sponsor, state Sen. Rob Marionneaux, D-Grosse Tete, unsuccessfully battled to fend off an amendment that calls on the governor and other state leaders to develop a plan “for the reduction and eventual elimination of the state personal and corporate income taxes” for the Legislature to consider next year.
Marionneaux asked legislators to reject the amendment and vote their conscience on the tax phase-out proposal.
Several of Marionneaux’s fellow Democrats voted in favor of the study amendment by state Sen. Jack Donahue, R-Mandeville.
“We needed something to slow down the runaway train,” state Sen. Lydia Jackson, D-Shreveport, said on why she backed Donahue’s amendment.
Jackson said embracing a more than $5 billion income tax repeal without a thorough discussion would be irresponsible.
She said she found it hard to reconcile the proposal with daily complaints from state residents about the impact of a $1.6 billion projected shortfall in the fiscal year that begins July 1.
SB259 survived two committee debates before faltering on the Senate floor.
The proposal initially before the Senate on Tuesday was to phase out the state personal and corporate income taxes by Jan. 1, 2022.
The bill initially would have reduced state revenue by $133 million.
By the time the taxes would be completely repealed, state government stood to lose more than $5 billion in revenue.
Some legislators had urged Marionneaux to develop a plan for replacing the revenue.
He vowed to do so.
Marionneaux seemed to make good on that promise by dangling two amendments to eliminate tax breaks that drain state revenue.
However, he never asked the Senate to vote on either of them.
“Are you going to offer your plans?” state Sen. Danny Martiny, R-Metairie, asked at one point during the hours of debate on the legislation.
“At the appropriate time,” Marionneaux replied.
At issue was whether the Senate is allowed to create revenue raising proposals. Such measures are supposed to originate in the House.
Other legislators, including Donahue, brought their amendments to a vote.
“I like the fact that it’s a plan,” Donahue said of his amendment.
Marionneaux accused Donahue of trying to kill his bill.
Donahue insisted he wanted to set up a commission to go about eliminating the tax.
Under the amendment, which passed on a 21-17 vote, the commission would submit a written plan on eliminating the state income tax to the Legislature and the governor by Jan. 6.
The Legislature then would have the option of adopting it.
Afterward, Martiny told Marionneaux not to complain about gamesmanship when that was what he was doing.
Marionneaux said his proposal to repeal the state income taxes was not a last-minute attempt.
“The repeal of income tax in the state of Louisiana has been an ongoing effort for a number of years,” he said.
Marionneaux said nine states, including Alaska, Florida, Tennessee, Wyoming and Texas, lack a state income tax.
State Sen. Robert Adley, R-Benton, urged the Senate to adopt the amended proposal.
“You got your study ... Let’s send it to the House,” he said.
The Senate voted 35-4 in favor of advancing the bill.
Voting FOR a study of the income tax repeal (21): Sens. Alario, Appel, Broome, Cheek, Claitor, Crowe, Donahue, Erdey, Jackson, Kostelka, Long, Martiny, Michot, Mills, Morrish, Mount, Nevers, Quinn, Smith, Thompson, and Walsworth.
Voting AGAINST a study of the income tax repeal (17): State Sens. Adley, Amedee, Chabert, Dorsey, Gautreaux, Guillory, Heitmeier, LaFleur, Marionneaux, McPherson, Morrell, Murray, Perry, Peterson, Riser, Shaw and Willard-Lewis.
NOT VOTING on a study of the income tax repeal (1): President Chaisson.