Not many voters participated, but the relative handful who did decided Saturday to launch a historic change in the way Louisiana levies and collects income taxes.
Turnout was only about 13.6% of the state’s 3 million registered voters and the majority approved wording changes in the Louisiana Constitution that will reduce how much individuals and corporations pay in income tax and jettison a deduction that had saved taxpayers thousands. But, voters turned down an effort to centralize the collection of sales taxes and remove the age-old right of local jurisdictions to gather the taxes their local voters had approved.
“The public gave us the green light. We’re bound and determined in the next two years to make this state look as attractive as we can with real tax reform,” said state Senate Revenue & Fiscal Affairs Committee Chair Bret Allain, who sponsored the legislation that became Amendment 2 and acted as something of a tax swap that pays for lower tax rates with the funds that come from eliminating a lucrative tax deduction.
The Franklin Republican was at the center of a group of lawmakers who, after years of stalling, sought to untangle a complex web of tax regulations that led Louisiana to have one of the nation’s highest tax rates, yet one of the lowest tax burdens after applying a wide range of special interest deductions, exemptions, and other breaks.
Four amendments were on the ballots in all 64 parishes and three were refused by the voters.
The number of mail-in ballots for Saturday’s election – triple the amount of the last similar contest in 2017 – fueled nearly 50,000 more vote…
Amendment 4 was denied by the 72% voters. It would have allowed the governor, in times of financial crisis, to use for everyday purposes 10%, rather than 5%, of the funds that are legally locked for a single purpose and thereby mitigate the amount of service cuts needed to balance the budget. The governor would have needed to get the Legislature's approval to do so.
And on Amendment 3, 58% of the voters across the state withheld authority for five levee boards to raise property taxes up to 5 mills in the six parishes where they operate. All the other levee boards have taxing authority. Voters statewide needed to approve the change in wording and the voters in those parishes also had to OK the taxing authority. Voters in Calcasieu, Cameron, Iberia, St. Tammany, Tangipahoa, and Vermilion parishes did not.
But Amendment 1 and Amendment 2 attracted the most attention.
Amendment 1 was rejected by a tally of 199,291 to 214,132 with all 3,714 precincts reporting, according to the Secretary of State's unofficial count.
Amendment 1 would have removed the constitutional language that allows local jurisdictions to collect and keep taxes on sales in their parish and would have allowed the Legislature to set up an eight-member commission of state and local appointees to collect taxes on sales statewide and distribute the proceeds to the appropriate jurisdictions.
It wouldn't have affected the amount of sales taxes, how much is charged, how much is exempted or how much state finances lean on sales taxes, which shifts the burden onto low- and middle-income taxpayers.
Though the Louisiana Municipal Association participated in drafting the legislation, the group didn’t take a position. But some of its more high-profile members, such as New Orleans Mayor LaToya Cantrell, actively opposed the measure.
The measure received voter majorities only in Avoyelles, Bossier, Caddo, East Baton Rouge, Jefferson, Lafayette, Madison, Natchitoches, Rapides, St. John The Baptist, St. Landry, St. Tammany, Tensas parishes.
Amendment 2 was approved with a 58% majority – 223,269 to 189,973 – statewide, according to complete but unofficial results released late Saturday by the Secretary of State. The proposal was approved by majorities in 38 of the 64 parishes.
This amendment removed the federal income tax deduction from the Constitution, which allows the Legislature to decide the future of the $795.5 million write-off, and lowered the highest individual income tax rate from 6% to 4.75%. But a law dependent on the outcome of this election lowers the maximum rate to 4.25% — a reduction of revenue offset by the elimination of the federal deduction.
When the dust settles, about 93% of the state’s taxpayers would pay less.
The first $12,500 in income for single filers and $25,000 for joint filers would be taxed at 1.85% instead of 2%. The next $37,500 of net income for single filers and next $75,000 for joint filers would be taxed at 3.5% instead of 4%. Net income in excess of $50,000 for single filers and $100,000-plus for joint filers would be taxed at 4.25% instead of 6%.
Median household income in Louisiana is $49,469, according to the U.S. Census Bureau.
Two other companion laws triggered by the election’s outcome to lower corporate income taxes and the franchise tax on a business’s retained earnings and investment capital.
After years of doing taxes the same way, Louisiana voters beginning Saturday are being asked to decide if the state should head in a different…
Both Sen. Allain and Barry Erwin, head of Council for A Better Louisiana, along with business lobbyists spent a lot of time crisscrossing the state to sell voters on the changes proposed to the state’s tax system.
Amendments 1 and 2 proposed complicated changes to an already hard-to-follow system using language that wasn’t straight forward about a subject, taxation, that most voters instinctively reject. Often changes to the Constitution, necessarily, are couched in obtuse language necessary for the legalities but difficult for laymen. “We must have gone over the wording 40 times, no, I can’t tell how many drafts of the ballot language to try to make it clear and simple as we could and still do the job,” Allain said.
“I heard a lot of doubt,” Allain said about the rooms he addressed. “I can’t count how many speeches I gave trying to convince people that this was real tax policy reform.”
“Walking in, there’s a blank slate,” Erwin said of the groups to which he spoke. “When we can explain what it is and what does, I think most, well, I’ll say many, of those get it and left in favor.”