Governor says tax rewrite should be fair and predictable
BATON ROUGE, La. (AP) — Gov. John Bel Edwards looked ahead Thursday to next year’s legislative session, saying Louisiana needs to enact a tax structure that is fair, predictable and “sufficient” to pay for state services.
“We don’t have it today,” the Democratic governor said in a state-of-the-state speech at the annual meeting of the nonpartisan Council for A Better Louisiana.
Edwards and lawmakers are gearing up for a tax reform debate during the 2017 legislative session, a rewrite aimed at ending several cycles of budget woes. But the leaders who will be integral to crafting the plans and getting them passed into law disagree on what the term “reform” means — and whether they want to raise more money for government as they rewrite tax laws.
The governor suggests more dollars likely will be needed.
“There is no Santa Claus, and people want and deserve a certain level of services,” Edwards said. “We just have to live in the real world, and we have to decide that we are going to pay for the government that we want. And we’ve got to bring this into balance. The longer we wait, the greater disservice we do to our state.”
At the governor’s urging to balance the budget, lawmakers passed more than $1.5 billion in tax increases to fill gaps in this year’s nearly $28 billion state operating budget. But the tax revenue didn’t come in as high as expected.
Combined with blows to the state treasury from the slumping oil and gas industry, Louisiana is expected to have a shortfall topping $600 million to close this year.
In office 11 months, Edwards inherited a budget mess. He and lawmakers enacted mainly temporary tax hikes to fill holes — until they could do a full rewrite of tax laws in 2017. They’ve created a massive financial cliff for 2018, when the temporary taxes fall away, upping the sense of urgency for tackling taxes in the next legislative session.
But before anyone can talk about raising additional dollars for the state treasury, they’ll be debating whether and how to fill the gap they created for themselves.
House Speaker Taylor Barras, R-New Iberia, attended the speech and said he’s optimistic the tax session can be successful. He’s skeptical of whether additional money should be raised, or if lawmakers can further lessen state spending.
“We have done some significant cuts, but I think the revenue raised to the cuts is still kind of out of proportion,” he said.
As a debate starting point, the governor and lawmakers can look to the proposals released by a study group of economists, tax experts and other policy leaders that urged sweeping changes to the state’s sales, personal income and property tax policies. Edwards said his tax proposal will include many of those recommendations.
Though House Republicans blocked several of Edwards’ tax ideas earlier this year, Barras said he believes lawmakers want to work on a successful, stabilizing tax rewrite.
“People realize that standing in opposite corners just because will get us nowhere,” the House speaker said.
Edwards said a bipartisan push to rework Louisiana’s criminal sentencing laws will be a focus for the 2017 legislative session, modeled on similar efforts in other Southern states.
“The people in Louisiana are not innately more sinister, more evil or more criminal than people elsewhere,” he said. “Why do we have the highest incarceration rate in the nation?”
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