With two amendments proposed to the Louisiana Constitution, No. 3 and No. 4 on the Oct. 24 ballot, voters are asked to deal with a somewhat obscure technical issue of lawmaking, and an even more obscure legal dispute involving one small parish in northeastern Louisiana.
Perhaps these should never have come so far as to become statewide ballot propositions, but they have, so we offer our suggestions on these propositions.
3. Legislative Sessions: Yes
Amendment No. 3 broadens language in the constitution regarding fiscal sessions of the Legislature. The current law is thought by lawmakers to be unduly restrictive. Fiscal sessions are those dealing with budget and tax matters, but as the state’s long list of tax breaks and business incentives have grown – including rebates of taxes via credits – the existing language has caused confusion about what bills can be filed in the short sessions.
Compounding the confusion is that the fiscal sessions do allow five more general bills to each legislator. Those are precious slots for lawmakers, who want to be able to make specific proposals during the fiscal session; they also want to be able to generate bills that provide for tax administration or other matters not now explicitly authorized. If a fiscal session bill is ruled a general bill, that would take away one of those important slots for a lawmaker’s other purposes.
If this sounds like insider baseball, it is. Does it fundamentally alter the dynamics of fiscal sessions? We don’t think so, so it seems safely a “yes” vote.
4. Property Taxes: No
If you want the definition of an obscure issue rising to the level of a statewide ballot proposition, look to West Carroll Parish.
In this poor and rural parish, with a very limited property tax base, the local assessor and sheriff levied property taxes on an out-of-state natural gas facility owned by the municipal power company of Memphis. Because the Louisiana Constitution prohibits taxation of “public lands” and “other public property used for public purposes,” Tennessee sued and won, saying that language applies to their public property as well as that of a Louisiana city or parish. That still might be appealed, but the amendment intends to reverse the court’s decision.
While it is certainly important to West Carroll Parish, we believe this should be settled by the courts without the Legislature getting involved. It appears the courts may agree ultimately with the Tennessee plaintiff that the “public property” exemption does apply to the property of other states. If the amendment passes, though, does it also allow taxation of property of foreign countries?
And if it passes, should Memphis be eligible for an offsetting state tax credit? That would be good for West Carroll but bad for state taxpayers as a whole. For those reasons, the Louisiana Association of Business and Industry opposes Amendment 4.
Louisiana’s inventory tax has been stretched by local government into a way to tax oil and gas companies. The cost is passed on to the state by the inventory tax credit.
The credit was originally intended to promote warehousing of manufactured goods, not as an indirect state subsidy for local governments who tax oil and gas as inventory.
This is an outlier case of a larger sin, and that is the extension of property tax liability for liquid inventories, passing the cost on to the state via the inventory tax credit.
For the purposes of Amendment 4: Let the courts settle it, and let the parties and the state live with the consequences.