For the second time in as many months, the committee formed to revamp the way Louisiana government spends its money and taxes its people wants to postpone the release of its final suggestions.
State Revenue Secretary Kimberly Robinson said Wednesday the sweeping changes being considered were too great to completed by Friday’s deadline. She and economist Jim Richardson, her co-chair on the Task Force on Structural Changes in Budget and Tax Policy, expect to receive a letter Monday from legislative leaders setting a new Nov. 1 deadline.
“We’ve taken a lot of votes over the last two meetings,” Robinson said. But the panel needs more time flesh out the proposals in a final report.
The 13-member task force – whose roster includes economists, accountants, business leaders, state officials and government policy researchers – has been meeting weekly since formed by the Legislature in March. Their first deadline was Sept. 1.
The group tasked with crafting a long-range plan for stabilizing Louisiana's turbulent state…
The plan is for the task force to deliver its recommendations and report to give legislators a few months before convening in April to sell the ideas to constituents and draft the bills.
As of Wednesday, the task force had agreed on only a few of what’s expected to be a massive change in the state’s tax code.
The group recommends reducing the state’s five-cent sales tax to four-cents. But they will need to tax services previously untaxed, such as for debt collections, cable television, residential repairs, to make up for the lost revenues, Robinson said.
The Legislature earlier this year had agreed to a temporary sales tax hike – from 4 percent to 5 percent – to plug the nearly $2 billion hole in the state budget. But it's set to expire in 2018, leaving an estimated $1.5 billion gap.
They’ve also agreed on doing away with a deduction taxpayers can take on their state income tax returns for the amount of taxes owed the federal government.
The panel of experts who have been tasked with coming up with recommendations for how Louisi…
But all sorts of the other issues are still floating.
They haven’t, for instance, decided on how to handle property taxes that often are refunded manufacturers and homeowners through credits like the homestead exemption and the industrial tax exemption.
They approved a resolution finding the state franchise tax was bad for business and that it should be either rewritten or reduced or phased out.
Tax Force member Jason DeCuir pointed out that tax experts consider the charge damaging. “If you lower a bad tax, it still has all the bad elements,” said the former Revenue Department official during the Jindal administration who now is in private business.
Task Force member Robert Scott, who heads the Public Affairs Research Council of Louisiana, said only 16 states have a franchise tax, which is based on assets held, and five states have or are in the process of phasing them out.
Experts and the business community have long complained about the complexity of Louisiana’s taxes.
And the system that includes almost 200 exemptions fails to raise enough money to cover the promises the state has made, leading to huge deficits year after year. In fact, in October state government is going to have cut services and possibly lay off workers to raise money enough to pay for about $200 million worth of bills from the fiscal year that ended June 30.