Tax policy should be fair, and the responsibility for supporting public services should be evenly distributed.
Right now in Louisiana, our poorest citizens pay over 10 percent of their income in state and local taxes, while the top one percent – those making over $1 million a year – pay about five percent.
Lobbyists for big business complain that Louisiana has high corporate taxes, but because of all the exemptions available to them, big business actually pays less than one-fourth of the taxes on the books.
Louisiana doesn’t have a spending problem, we have a revenue problem. The bulge in the budget over the past five years was from federal disaster relief and recovery funds. Spending in the state general fund has remained flat, even though the demand for state services has risen.
Here are the elements of the Better Choices for a Better Louisiana legislative agenda:
Moratorium on new tax exemptions and enact a legislative study of tax exemptions:
We have to get a handle on the $7.1 billion that Louisiana loses annually to tax exemptions. If they serve a purpose in growing our economy, creating jobs and helping families, we have no problem with keeping them.
But unless lawmakers follow the act they approved last year and actually study all of the tax breaks offered by the state, we’ll never know if we are getting the return we should be on these expenditures.
We certainly shouldn’t create new tax loopholes until we are confident that they will create greater opportunity for the working families of Louisiana.
Duplicate disclosure/reporting requirements of those entities seeking/accepting state appropriations:
The state requires detailed applications for some tax exemptions, but asks for very little information about some others. We believe there should be strong requirements for any tax exemption to guarantee that the people of Louisiana get their money’s worth.
Duplicate programs offering public access to budget information so the public has access to information about tax exemptions:
Louisiana has a widely praised Web site called LaPAS, on which citizens can easily find information about state spending. But the site with information about tax exemptions, LaTRAC, can’t be easily accessed and does not offer as much information. We believe the public deserves as much access to information about tax exemptions as it has for state spending.
Impact of state tax exemptions on local governments:
Local governments like parishes, municipalities, and school boards get much of their revenue from property taxes. The legislature can grant property tax exemptions even though the state gets no revenues from property taxes. Most of these go to big business and industry.
When the state grants those exemptions, it deprives local governments of revenue without giving local officials any say in the matter.
That often means an even larger tax burden for local small businesses, which do not qualify for the industrial exemptions.
We believe that before the legislature grants tax exemptions, they should have to consider the impact that the exemptions will have on local governments.
Increasing sin taxes:
It just makes sense that activities like smoking tobacco and drinking alcohol, which raise the cost of public health services, should be taxed at a higher rate. Yet Louisiana has one of the lowest cigarette taxes in the nation, and hasn’t increased alcohol taxes in generations.
1. Increase cigarette taxes. A $1 per pack increase would net the state $301 million per year.
2. Increase alcohol taxes. Raising beer taxes by $2.50 per barrel, wine taxes by $0.86 per liter and liquor taxes by $0.24 per liter would net the state $38.5 million per year.
3. Increase gambling taxes. Over $100 million in annual revenues would result from a 5% increase in the riverboat franchise fee and a 4% increase on video poker devices.
Temporary suspension of the Stelly Plan rollbacks
Temporarily suspending the 2007 and 2008 rollbacks of the Stelly reform would raise over $500 million each year that the suspension is in effect.
(One of the BCBL partners, AARP, does not endorse the suspension of Stelly rollbacks.)