La.’s tax structure deserves overhauling

Aug. 7-8: Cerebral Palsy Telethon (Houma)
August 3, 2010
Houma’s next power plant may be in M.C.
August 5, 2010

Because of large state budget cuts, some services once funded with state tax dollars will have to be funded with local dollars – or not at all.

That is not necessarily a bad thing. We have long argued that too many parish and municipal officials in Louisiana look to Baton Rouge for funding of projects and services that, in an ideal world, should be funded at the local level.

One factor that traditionally has given state government a larger role in funding local projects and services is the property tax system. Louisiana’s homestead exemption law limits the ability of local governments to raise money, which makes them more reliant on state funding for local services.

Louisiana has just begun a tight fiscal year in state government, and the next fiscal year is expected to be a grim one as well. That could mean another round of diminished funding for local school districts, libraries and other institutions.

Louisiana leaders can use this funding crisis as an opportunity for thoughtful reflection on the state’s tax structure. Or they can muddle through and cling to business as usual.

History doesn’t offer encouraging precedents. State leaders made a thoughtful move toward restructuring the state’s tax system several years ago with the Stelly Plan, but key elements of that plan were repealed.

Given the public’s general antipathy to anything that has to do with taxes, we’re not betting on constructive change anytime soon.

– The Advocate, Baton Rouge, La.

The Times, Shreveport, La., on the federal drilling moratorium:

Federal courts disagreed with the Obama administration’s decision to temporarily prevent 33 floating rigs from continuing drilling in the Gulf of Mexico. So a new ban was instituted, this time based on the types of blowout preventers used rather than the depth of water where the deepwater rigs are situated.

Whether this latest effort will pass muster has yet to be seen. Regardless, the Obama administration’s attempts have resulted in a de facto moratorium.

Should northwest Louisiana care?

Should we be bothered that this could put more than 10,000 of our brothers and sisters to the south out of work within a few months?

Should it matter to us that Louisiana, according to the state Economic Development Department, risks losing more than 20,000 existing and potential jobs if the federal review of the moratorium takes longer than six months?

Should we care that although the ban does not target shallow-water wells, permitting of such rigs has ground to a virtual halt?

Should we be concerned that less drilling could mean less revenue for Louisiana, augmenting a projected state deficit in the neighborhood of $2 billion for the fiscal year that began July 1?

Should we prepare for the worst even though state revenue forecasts and employment data, which traditionally have a months-long lag, have yet to reflect the true impact of the drilling ban?

And should we factor into our vision of the future, one we already know will not include General Motors’ Shreveport plant, the likelihood that less state revenue could mean further cuts to services in this area?

The answer is an emphatic yes. For history bears out that Interstate 10 is no buffer against what ripples north.