The Times Picayune: Gov. Bobby Jindal’s tax plan not ‘dead on arrival,’ House Ways and Means chairman says
media mentionBy Jeff Adelson, NOLA.com | The Times-Picayune
on April 01, 2013 at 9:17 PM, updated April 01, 2013 at 11:05 PM
Gov. Bobby Jindal’s controversial tax swap plan shouldn’t be considered “dead on arrival,” the chairman of the House Ways and Means Committee said Monday. Though the plan has been criticized by a variety of groups, Rep. Joel Robideaux said debate about the proposal is not over.
“If the governor is pushing something, it’s never dead on arrival,” Robideaux said at a Press Club of Baton Rouge event on Monday. “I’m not arguing that there’s not hurdles or there’s not a lot of fixes to be made.”
The tax proposal, which would eliminate the state’s income and corporate taxes and replace them with a higher, broader sales tax, has faced criticism on a variety of fronts in recent weeks. Those critiques have come from across the political spectrum, with liberal organizations worrying that the plan would hurt the poor, business groups arguing it would burden Louisiana industry, and other groups questioning whether the numbers in the proposal even add up.
There is uncertainty about how the tax plan could evolve once the Legislature begins digging into its specifics, and Robideaux, R-Lafayette, described two bills he filed on Friday to allow the Legislature to delve into some additional, related issues. Those bills call for referendums on constitutional amendments that would allow gasoline sales to be subject to sales tax, and would exempt bottled water from sales tax.
“Those were filed in an abundance of caution,” Robideaux said, “in case the debate went there, and the body decided that was the way they wanted to go.”
Last week, House Speaker Chuck Kleckley said he expected the bills to move within the first two weeks of the session, which begins April 8, but on Monday, Robideaux said the debate won’t proceed until lawmakers get an analysis from the legislative staff.
“Whenever the governor’s bill is ready to be heard, it’ll be heard,” Robideaux said.
The tax proposal came under criticism again on Monday as the Institute on Taxation and Economic Policy, a Washington think tank that advocates for policies favorable for low-income families, issued a report questioning the Jindal administration’s assertions that the plan would not hurt the poor. The report, which takes into account the rebates for low-income residents and retirees that the administration says would offset higher sales taxes, finds that those making $53,000 or less would see their taxes go up by .3 percent to 1.3 percent under the administration’s proposal.
The report assumes that a large portion of the new taxes that would be shifted onto businesses would be passed on to consumers, Executive Director Matthew Gardner said.
Meanwhile, the plan would result in significant tax cuts for those making more than $93,000 a year, according to the report.
Department of Revenue Executive Counsel Tim Barfield said that the administration’s position remains the same: that all income groups would benefit from the tax swap. He also suggested the proposal would benefit the poor by encouraging job creation. “We want to create opportunities for the poor, we want to create jobs for the poor and low-income,” Barfield said.
A key element in legislative debate will be a report by the Legislative Fiscal Office, which analyzes for lawmakers how proposals will affect the state and its residents. That report is expected to differ from the administration’s projections, and Robideaux said lawmakers would likely rely on that document, known as a “fiscal note,” more than on estimates provided by the Jindal administration.
That report also likely will help legislators determine whether the tax proposal has met the Jindal administration’s stated goal of making the plan revenue neutral, which would ensure that the state takes in the same amount of money in taxes under the new system.
“I’m not going to say its revenue neutral until I see the numbers from the Fiscal Office,” Robideaux said.
The analysis from the Fiscal Office could prove crucial for lawmakers in other ways, because historically, legislative staff members have disagreed with projections offered by the administration and its consultants. The use of projections developed by a consultant hired by the administration, instead of figures developed by the Legislative auditor’s office, led to an ongoing lawsuit over a retirement bill passed last year.
Barfield said Monday that the Jindal administration would support a tax plan only if it is revenue neutral, and said that the administration would not support independent proposals filed by lawmakers that would phase out the income tax without replacing the lost revenue.
“I think the governor’s been absolutely clear: if there’s not revenue neutrality, he’s not going to support the package,” Barfield said.