Can Gov. Landry’s tax package be saved?

The Louisiana Capitol. (Credit: ReDunnLev)

Nov 19, 2024

With seven potential session days left, and passage of the full package looking less likely by the day, Gov. Jeff Landry’s administration and supporters of his overhaul effort are trying to figure out a viable path forward. 

Senate Revenue and Fiscal Affairs met Monday but did not take up the package’s key pieces, pushing votes to today. Committee Chair Franklin Foil said potential amendments will be discussed in the interim that might protect popular incentive programs, such as those supporting the film sector and renovations of historic buildings. 

The administration had proposed closing every incentive program to new applicants on June 30, though existing agreements would be honored. Foil said options include leaving the existing statutory sunset dates in place (rather than moving them up to next year) and reducing the annual cost. 

“We’re still talking about which, if any, to keep, and where to cap these programs,” he said.

Getting rid of incentives and exemptions is supposed to help the state save enough money to slash interest rates without creating deficits. Foil said lawmakers still hope to get the personal income rate down to a flat rate of 3 percent, or very close to it. 

On the other hand, while many members would like to get the corporate income tax rate down to 3.5 percent, as the administration has proposed, the personal rate is more of a priority, Foil said. 

Meanwhile, the administration is still trying to find the votes in the House to pass HB 9, which extends sales taxes to currently untaxed services. There were 42 services on the original list to be taxed, which was expected to raise about $502 million, Rep. Neil Riser, the bill’s sponsor, told members. 

Under the amendment Riser discussed Monday but did not bring to a vote, only 19 services would be taxed, raising about $130 million. The slimmer bill will make it harder to pay for eliminating local taxes on prescription drugs, he said. (The proposed amendment has been posted, in case you want to compare it to the original bill.)

Riser’s bill is the only one scheduled for debate on the House floor this afternoon. HB 21, which requires the secretary of the Department of Revenue to annually estimate revenue derived from aviation fuel collections, and HB 24, which provides for energy leases on state land, are on the Senate agenda. 

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