With expected $500 million shortfall, Jindal administration promises plan to balance budget _lowres

Advocate Photo by MARK BALLARD -- Senate President John Alario, left, and LSU Economist Jim Richardson hear unexpectedly bad news about the state's revenue picture during a meeting of the Revenue Estimating Conference.

Released in the feverish run-up to the presidential election, a purely advisory report on reforming Louisiana's tax structure was bound to be overshadowed by the contest for the White House.

For Louisiana, though, there are few more vital topics to address, and the generally sensible suggestions track the goals of reformers in the State Capitol over the years.

How will it get done? Gov. John Bel Edwards and the Legislature must agree to a package, because of the complexity of the various changes recommended, and then voters must also do their part.

All that will be difficult, including voter approval of constitutional changes. A modest change in the corporate income tax structure, endorsed by the tax study panel, failed in Tuesday's election. Obviously, it was overshadowed by other events and issues, but the loss indicated that any new reform package must be sold to the public as well as lawmakers.

The urgency of the problem cannot be underestimated.

Not only is the state still seeing budget cuts to fill gaps left by the dubious financial practices of former Gov. Bobby Jindal's administration, but the Jindal-era shortfalls were filled with temporary taxes on both business and individuals.

Louisiana has the odious distinction of the highest rate of sales taxes in the nation, and those taxes are collected inefficiently in a bureaucratic fashion intended to protect local patronage jobs instead of making it easier to do business in the state.

The proposals of the 13-member study committee, "if adopted as a comprehensive set of reforms, will help to establish a long-term, stable foundation for Louisiana's finances," Revenue Secretary Kimberly Robinson and LSU economist Jim Richardson, co-chairs of the task force, wrote to legislative leaders.

Among the ideas: lower tax rates, broadening what items are subject to taxes and reducing the number of complicated state tax breaks.

Each idea will have its detractors, because somebody has to pay more, ultimately, even if there are reductions in the tax rates that offset some increases.

In 2018, the one-cent sales tax increase passed to fill some of the budget hole will expire, along with other temporary taxes or reductions in various business credits and exemptions.

Louisiana can't get by with just a few hundred million here or there. If the state wants to shed that one penny on every sale, almost a billion dollars must be raised to fill the gap; that means higher income tax collections or a drastic increase in business taxes would be necessary, because the math doesn't work any other way. Such big changes require thought and precision on the part of lawmakers, not always their strong suits when it comes to the politically charged issue of taxation.

Everybody will have a lot to chew over in the next year or so, but we simply can't afford to put off this big problem any longer. We don't necessarily agree with everything in the panel's report, but we're willing to back a package that brings predictability to tax charges for families and businesses — and stability to the operation of state government.

Maybe it got a bit lost in the election news, but the new report is a big step forward on a contentious subject.