Jindal plan would remove income, raise sales taxes
[Editor's Note: This story was updated at 4:32 p.m. Thursday.]
BATON ROUGE, La. (AP) — Gov. Bobby Jindal on Thursday proposed a hefty jump in the state's sales tax rate and $1.4 billion in new taxes charged on services to help offset the cost of his push to eliminate Louisiana's income taxes.
The Republican governor and his leader on the tax code revamp, Tim Barfield, outlined the first specifics of Jindal's proposal to rewrite Louisiana's tax code, but they didn't provide the legislation with the full details.
Jindal wants to boost state sales taxes from 4 percent to 5.88 percent; nearly triple cigarette taxes from 36 cents per pack to $1.41; and assess sales taxes on a wide range of services not currently taxed, such as haircuts, cable TV and landscaping.
He also wants to remove $96 million in sales tax breaks, shrink the number of severance tax exemptions for the oil and gas industry, and limit the state's economic development incentives for the film industry.
In exchange, the plan would do away with the state's individual income tax and the state's corporate income and franchise taxes, which bring in about $3 billion a year.
"We think the next big step to bringing our kids back and growing the state economy is getting rid of the income taxes," Jindal told the House and Senate tax-writing committees, in a rare appearance at a legislative hearing.
It's unclear who would win and who would lose with the tax code changes because key details were still missing.
If lawmakers agree, Louisiana's combined state and local average sales tax rate would shift to 10.75 percent, the highest rate in the country. And new services would be swept into the state's 5.88 percent sales tax rate.
Rep. John Bel Edwards, chairman of the House Democratic Caucus, called the governor's tax plan the largest middle-class tax hike in state history.
"While the governor's office was light on details, the only clear thing about Gov. Jindal's proposal is that it will raise taxes on most Louisiana families, Louisiana workers and Louisiana small businesses in order to give tax breaks to out of state corporations and the wealthy," Edwards said in a statement.
Jindal administration leaders said they've worked to limit the impact on the poor and others that don't currently pay income taxes but would be hit with higher sales taxes.
Tax exemptions on food, medications and residential utilities would remain in the constitution, and new tax rebate programs would help low-income residents and some retirees offset the sales tax hikes. No details were provided on how the rebate programs would work, what they would cost or whether the rebates would be capped.
"This plan will put everyone on a level playing field, but makes sure no one pays more than their fair share," Barfield said.
The changes would kick in Jan. 1, 2014, Jindal said.
Lawmakers will consider the ideas in the legislative session that begins April 8. Initial reviews from committee members were skeptical, with Republicans and Democrats questioning the need for the overhaul, rather than smaller tweaks to the tax code.
"I hope you can make me comfortable because I'm uncomfortable now," Sen. Bob Kostelka, R-Monroe, told Barfield.
Barfield said Louisiana was still operating off a tax code devised in the Huey Long-era, with some exemptions that date back to 1922. He said Louisiana currently has a low tax burden when exemptions are considered, but he said the system is complex and difficult to navigate.
"The tax code has reached dysfunction," he said.
Rep. Eddie Lambert, R-Gonzales, asked whether a more limited tax revamp would be more appropriate.
"Why wouldn't we look at these exemptions to make the code easier rather than this massive undertaking?" he said.
Jindal wants the tax code rewrite to keep the state's overall tax collections at the same amount that would have been received without the changes — what the governor calls "revenue neutral."
His goal is to get rid of the income taxes. He told lawmakers he's flexible on how to do that if lawmakers want to tweak parts of his plan.
"We are not presenting to you today a plan etched in stone," the governor said. "There are a lot of different ways to get to our end point, which is a better tax code for the people of Louisiana."
JUNE 19 Former Saint Steve Gleason, who is paralyzed by ALS, released a statement Tuesday in response to the Atlanta radio station's skit making fun of him and the disease, this Picayune post reports. What did he say? He said he'd accepted the apology of the DJs who did it, notes that at least the incident has got people talking about ALS, and asks anyone who is burning to take action about it to do so -- by helping him fight ALS.
JUNE 19 Blogger Ian McGibboney takes a look at the Gleason incident in this post. He makes a good argument about the difference between having free speech and being free from consequences for your speech (which none of us is). He also admits that many of us got upset before we listened to the skit -- but lets us know that the reality is far worse than we can imagine. It was the incredibly bad judgment, even more than the actual speech, that probably got those DJs fired, he opines.
JUNE 19 Washington Post blogger Aaron Blake writes about Sen. Guillory's switch to the GOP in this post. He writes what most political watchers in Louisiana know: Guillory was a Republican before he decided to run for the senate seat in a mostly-D St. Landry district, and has switched back now that he plans to run for Lt. Gov. in a mostly-R state. But how come Blake missed Guillory's appearance on a TLC pageant show? Now that is a video we'd like to see. (Again).
JUNE 19 Here's another Washington Post blog post about a Louisiana politician, and it's just plain scathing. Ezra Klein says Jindal's Politico post was "insulting" to the intelligence of voters, and adds that Jindal is personifying the "stupid" he's railed against, by being an "elite" who convinces GOP activists of "things that aren't true." Me-ow.
JUNE 19 Here's Gov. Jindal's post in Politico, in which he asks the GOP to get over losing to Obama (again) and stop "the bedwetting." (Uh, what?) He gives his Republican buddies what is probably a nerd's idea of a coach's motivational talk, which starts with a list of accomplishments that they can't seem to exploit and ending with an absurd description of liberals that sounds like a character treatment for a Fox "News" movie scripted by Gordon Liddy. Sure, he's preaching to the choir, but even the choir's not this gullible.
JUNE 19 Lamar Parmentel read Gov. Jindal's post on Politico, but thinks it was so dumb it probably was published in the wrong paper. This post by Lamar on the Daily Kingfish opines that possibly Jindal's post was destined for the Onion -- because the governor couldn't possibly be serious here. If you listen closely, you can hear the staff of the Kingfish giggling.
JUNE 19 Blogger Robert Mann posts from Turkey, a country he has visited several times in the past few years. Mann gives an interesting overview of the current political and societal climate of the country, which -- if you're living under a rock and don't know -- is experiencing protests and turmoil these days. Mann promises to post as much as he can during his trip, which should be fascinating reading.
JUNE 19 Blogger CB Forgotston says the legislature is keeping the vicious cycle going with its funding of new buildings for the community college/technical college system. Universities across the state need maintenance and improvement on existing buildings, and the solution is to build new buildings at other schools? By the time the bonds are paid off, those buildings will be falling down, too, CB says.
Frank’s Casing Crew, now doing business as Frank’s International, will make its final appearance on ABiz’s list of the Top 50 Privately Held Companies in Acadiana this year, and once again it will likely be at the top with more than $1 billion in annual revenues. The 75-year-old company specializing in tubular fabrication and installation services to the oil and gas industry plans to offer shares of its stock to the public for the first time.
The defeat, or rather highjacking of House Bill 420 in the final days of this year's Legislative Session, say Reps. Vincent Pierre and Terry Landry, is the result of the propaganda spread by one unidentified local media outlet and an unnamed former state Representative, but nothing to do with the original legislation's lack of checks, balances or details.
He’s a singer. A songwriter. A piano man. A family man. He’s even got his own Wikipedia entry. He’s David Egan. And he knows ancient secrets about the monolithic stones of Stonehenge that he’s not willing to share.