Home » Louisiana tax study likely to be shelved, instead of enacted

Louisiana tax study likely to be shelved, instead of enacted

by Associated Press

BATON ROUGE — After months of study by a blue-ribbon panel commissioned to recommend tax overhaul ideas, Louisiana’s lawmakers are on track to reject most of the big-ticket concepts, sending the suggestions to the same dustbin as past studies.

Few task force tax suggestions have advanced beyond their first hearings. Several of the main proposals have been killed outright, while others haven’t even gotten a hearing as bill sponsors realized they’re unlikely to gain traction.

The stopping point for many proposals has been the conservative, majority-Republican House Ways and Means Committee, where most tax bills must start.

“Why do we have studies and put them on the shelf to collect dust?” said Rep. Rob Shadoin, a Republican from Ruston who sponsored four income-tax bills based on task force suggestions that were
jettisoned by the committee.

Baton Rouge Rep. Ted James, a Democrat on the committee, expects the Legislature will ignore the study’s recommendations, despite the looming loss of $1.3 billion in expiring taxes in mid-2018.

“I take no pride in saying this, but I predicted last year that the task force would be a waste of time,” James said. “I don’t see anything substantial getting out of here that could be called reform.”
The Task Force on Structural Changes in Budget and Tax Policy was created by lawmakers last year. The 13-member panel of economists, tax experts and policy leaders was pushed by Republicans, to study “budget and tax reform” and make suggestions that would put Louisiana more in line with other states and end its boom-and-bust budget cycles.

The recommendations would lower tax rates, broaden what items are subject to taxes and reduce the number of complicated state tax breaks. Gov. John Bel Edwards embraced many of the ideas, though he seemed to anticipate many of the proposals would go nowhere.

The task force suggested ending an expiring 1 percent state sales tax, in exchange for charging sales taxes on services such as cable television. It suggested lowering personal and corporate income tax rates by removing large tax deductions, and doing away with the corporate franchise tax. The panel proposed phasing out a local property tax charged on inventory, to save the state millions on a tax break given to businesses paying the tax.

Rep. Jim Morris, the Republican vice chairman of the Ways and Means Committee, said he judges tax bills with an eye toward the people in his northwest Louisiana district.

“I have to equalize what the task force said with what my people said,” Morris said. “My constituents don’t want any taxes of any kind, of any shape, of any form. None.”

The House committee advanced a heavy rewrite of Louisiana’s tax laws proposed by Rep. Barry Ivey, a Baton Rouge Republican. But the bills chart a different course than the task force suggested, and House lawmakers don’t think the proposals can win passage.

Asked if he expected any substantive tax bills to pass before lawmakers adjourn by June 8, Republican House Speaker Taylor Barras replied: “That’s probably too early to call.”

Shadoin said some of his Republican colleagues seem unwilling to support anything backed by the Democratic governor, including the task force proposals.

“One of the members said, ‘Rob, we like to support you when we can, but the problem was this was one of the governor’s bills.’ Is that as far as we’re going to go in analyzing these bills?” Shadoin asked.

Some House Republicans disagree with the task force approach to mainly focus on taxes. They directed the study panel to look at budget and tax reform, but received few suggestions on how to restructure state spending.

“They didn’t get the full scope,” said Rep. John Schroder, the Covington Republican who sponsored the task force legislation. “It was about spending and taxes. We got a full dose of taxes.”

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