Scant details revealed on proposed Jindal tax changes
Nearly two months after Gov. Bobby Jindal unveiled his idea to replace Louisiana’s income taxes with more sales taxes, the plan remains little more than a shell. The administration offers broad models of what’s being considered, but no details.
With only six weeks to go before the legislative session begins, it remains unclear when lawmakers – or the public – will see a specific package of proposals for a change that would touch nearly two-thirds of the state’s entire general fund for government programs.
And then, the legislative session for vetting it lasts only two months.
That timeline raises questions about whether lawmakers, business leaders, advocacy groups and residents of the state will have enough time to understand and properly comb through such a massive restructuring of the tax code.
Jindal said he won’t finalize the proposal until he meets with every lawmaker.
“This has been a very collaborative process, and the governor’s proposal will be released before session begins so that discussions can continue with legislators and stakeholders,” spokesman Sean Lansing said in a statement, not offering a timeline.
Rep. Joel Robideaux, chairman of the House Ways and Means Committee, will be carrying the bills for the governor. He said he thinks a firm package of proposals is about two to three weeks away. He hopes to get it to lawmakers at least three weeks before the regular session starts April 8.
Jindal wants the plan to be “revenue neutral.” That means he’s got to find new things to tax in order to make up for the loss of nearly $3 billion in income tax revenue that would be lost.
Who will be the winners and losers? That’s difficult to determine without the nitty-gritty details of a plan, but clearly some groups will get hit harder than others if lawmakers agree to reallocate what is taxed and how.
Jindal doesn’t want a straight removal of personal income taxes and corporate income and franchise taxes in exchange for a sales tax hike. He wants the income taxes gone, but how he proposes to fill that gap remains murky.
The governor’s point man on the tax code rewrite, Tim Barfield, says the proposal will include some sort of sales tax increase. Lawmakers say the sales tax hike being discussed is about 1.7 percent, on top of Louisiana’s already high sales tax rates, which average 8.87 percent when local and state sales taxes are combined.
Barfield, executive counsel at the revenue department, says a tobacco tax hike might be included in the governor’s plan. Lawmakers say the governor’s suggesting a more than $1-per-pack cigarette tax hike as he talks about it with them.
The murkier areas involve Jindal’s plans to eliminate some tax breaks and to make more products and services subject to sales taxes. New taxes could maybe fall on lawn services or roof repairs or cable TV or janitorial services.
Robideaux, R-Lafayette, said any proposal will have reams of supporting documentation from the accounting firm hired by the Jindal administration to work on the estimates. He said the ideas have been floated to lawmakers so they know what concepts they’ll be debating, even if they haven’t gotten specifics.
Conservative and liberal groups already have been weighing in about whether the tax restructuring could hurt the poor, cost more to retirees or boost the state’s business prospects.
When the governor’s office doesn’t like an analysis, a spokesman quickly rejects it as ignoring the facts. But it’s hard to suggest any analysis is accurate when no one has a complete plan to analyze.
Questions also remain about how estimates are even being developed for some pieces of the proposal. For example, how do you decide what getting rid of some tax exemptions will generate in new revenue when no one’s necessarily been tracking how much money they’ve siphoned from state coffers so far?
Whatever the answers, the implications of the tax rewrite reach into every household and business in the state.
EDITOR’S NOTE: Melinda Deslatte covers the Louisiana Capitol for The Associated Press.