An effort to repeal the state income tax surged back into play Monday with a tailored version of the proposal.
Senate Bill 259 now calls for a more than $5 billion phase-out of the state’s personal income tax over 10 years after a rewriting by the House Committee on Ways and Means.
The panel made two big changes to the legislation before voting without objection to send the bill to the House floor.
With the changes, the bill:
No longer would include the elimination of the state corporate income tax.
No longer would tie the repeal to action by a study committee.
“There’s a way to do it; it’s an accomplishable goal,” said the bill’s author, state Sen. Rob Marionneaux, referring to concerns about the amount of revenue that state government stands to lose.
The legislation initially would reduce state revenue by at least $113 million beginning in 2014. Because tax collections grow over time, the state is expected to eventually lose more than $5 billion once the repeal is fully implemented.
Marionneaux, D-Grosse Tete, originally proposed a repeal of both the state personal and corporate income taxes.
He protested when the Senate instead chose to create a study committee to produce a tax repeal plan in the future.
House Speaker Jim Tucker, R-Terrytown, predicted last week that the House would change the legislation into something similar to what Marionneaux originally proposed.
The House Ways and Means Committee did just that.
The panel’s chairman, state Rep. Hunter Greene, introduced amendments that rewrote the legislation.
Greene, R-Baton Rouge, first stripped off the corporate income tax repeal, making the bill mirror a proposal that he offered in the House.
He pushed back the phase-out start date to 2014, saying he wants to give the Legislature time to develop a plan based on what the study committee recommends.
Greene then put in language to ensure that the repeal is no longer tied to whether the study committee acts.
As he has in the past, Marionneaux pointed to the $7.1 billion in tax breaks that the state grants each year as a way to pay for the repeal.
“We can’t say no to the special-interest tax groups,” he said, noting that the committee voted in favor of granting an additional $30 million in tax breaks earlier in the day.
Marionneaux said the state gives away three times as much as it collects.
He said some of those tax breaks can be revoked.
Exactly which tax cuts would be eliminated is unclear. Marionneaux held up a thick book of tax breaks without targeting any of them.
State Treasurer John Kennedy said becoming a low-tax state would help Louisiana grow and prosper.
“There’s a reason Texas is growing and California and New Jersey … and other states are losing population,” Kennedy said.
Texas is among nine states without a state income tax.