Tax Reform Risks Local Services, Tax Elections
Lawmakers from both sides of the aisle are voicing their skepticism of Governor Bobby Jindal’s tax overhauls. The forum this morning: an annual pre-session briefing hosted by the Louisiana Association of Business and Industry.
Jim Patterson of LABI kicked off the presentation with what he’s heard from legislators about their private talks with Governor regarding his still unreleased tax overhauls. "[Gov. Jindal] does want to conform the local sales tax base to the state tax base," Patterson said. "This will help local governments to absorb what are going to be some relegation of services by the state to them.
Right now, local entities collect their own sales tax, but there may be moves to centralize sale tax collection at the state level. Rep. Johnny Berthelot, a former mayor of Gonzales, said he's "keeping an eye out" that the policy doesn't strip powers from local entities. "Any attempts to handcuff local government and its ability to raise taxes or collect taxes, I’m going to have some issues with, personally," Berthelot said. "Local government does not get the help it needs from state and federal government anymore."
Rep. Alfred Williams said local services like parks and school boards could be put at risk, and House Minority Leader John Bel Edwards suggested that those services may have to be bolstered by property tax increases – and because of the homestead exemption, businesses would bear the brunt of those hikes.
Edwards says lawmakers will run into trouble with the constitution if they consolidate tax collection. It says if the state were to add, for example, lawncare services, to its sales tax base, the citizens of the parishes that don’t already tax lawn mowing and landscaping would have to vote to approve the expansion. “And I’m just telling you these aren’t going to pass," Edwards said. "When people find out that they’ve got the highest sales tax in the nation, they are not going to pass.”
LABI won't have an official position on the reform until the plan is released. The governor says he won’t release his plan until he’s met with all legislators.