The fiscal-only session of the Louisiana Legislature that concluded Thursday won’t be remembered for its bipartisanship or collegial atmosphere.
There’s no denying, however, that lawmakers focused toward the end and approved legislation which supposedly will bring about positive developments in the state in the not-too-distant future. We’ve heard that before, but here’s hoping it pans out.
For years the state’s largest business organization — Louisiana Association of Business & Industry — hollered foul over the state’s antiquated tax code and for years LABI’s lobbyists returned to the Capitol on an annual basis to plead with lawmakers to do something about it. This year, LABI scored on two fronts, one of which must be approved by the voters this fall through an amendment to the state Constitution.
The most controversial of the two concerns doing away with a designated sales tax collector in each parish and consolidating those responsibilities in one office in state government in Baton Rouge. Proponents argue the current system is too cumbersome and too complicated for businesses — particularly those out of state — that are required to remit sales taxes to governing bodies here. Somehow a single sales tax collector will make it better.
The proposed constitutional amendment would result in lowering the state’s income tax rates in exchange for prohibiting tax filers from deducting the income taxes they paid to the U.S. Treasury from their state tax returns. The change would be two-fold, meaning it would impact both personal and corporate taxpayers.
LABI and its comrades claim the tax overhaul will improve Louisiana’s standing in those all-important rankings of states that are business-friendly as well as tax-friendly for individuals. It’s not necessarily clear how moderately lowering state income tax rates in exchange for losing a lucrative deduction will miraculously inspire Fortune 500 companies to flood into Louisiana to hire a bunch of people to do business here. We’ll just have to hope the experts at LABI and such know what they’re talking about. Again.
Yet, the big enchilada of the legislative session didn’t concern supposedly lowering taxes or allowing law-abiding Louisianians to carry a handgun without a conceal carry permit or prohibiting men from playing female sports, though the latter two still figure prominently. Instead, it was state Sen. Rick Ward’s idea to shift sales taxes collected from vehicle sales to improving Louisiana’s horrendous infrastructure, namely its roads and bridges. It amounts to about $300 million a year though provisions were put in place to shift some of the money to the state’s general fund if a budget deficit should arise.
Ward’s power play isn’t out of the woods yet. Though the Legislature approved it, Gov. John Bel Edwards has expressed reservations about it and has hinted he might veto it since the sales tax revenues would be diverted from the general fund to a sub-fund of the state’s highway trust fund. Edwards apparently believes any money taken away from the general fund means the state would put its huge social welfare programs at risk.
Apparently Edwards doesn’t know or never knew the sales taxes generated by vehicle sales were initially earmarked by the Legislature for building roads and bridges. It’s also entirely possible Edwards is fully aware of it but simply chose to ignore it like so many other politicians over the years. Meanwhile Louisiana’s roads and bridges continue to crumble.
It’s all about priorities: Edwards has his but drivers have theirs.
Sam Hanna Jr. can be reached by phone at 318-805-8158 or e-mail at email@example.com.