Posted on 05/13/2008 1:33:02 AM PDT by abb
Behind-the-scenes negotiations are under way at the State Capitol to scuttle a proposal that would gradually eliminate the state income tax, lawmakers said Monday.
As an alternative, the Jindal administration and the legislative leadership suggested a $302 million tax break, said state Sen. Buddy Shaw, R-Shreveport.
The suggestion is identical to the way Shaw originally drafted Senate Bill 87 with one distinction.
The alternative proposal is to phase in the tax break over two years beginning in 2009, a delay that Shaw opposes.
Shaw said he does not want taxpayers to have to wait until 2010 — when they file their returns for the previous year — to receive tax relief.
Shaw said he and Jindal agree that lawmakers should strip from the bill an amendment that would gradually eliminate the state income tax.
As it stands now, SB87 eventually would cut $4 billion a year from state coffers by eliminating the state personal income tax by 2017. Gov. Bobby Jindal did not respond to a request for comment on Monday.
But Jindal said last week that tax breaks must be accompanied by spending cuts.
“The governor supports tax cuts. He hasn’t spoken to Senator Shaw yet, but is open to a variety of solutions,” Jindal’s press secretary, Melissa Sellers, wrote in an e-mail.
Until a resolution is reached, the House Ways and Means Committee is delaying a decision on SB87.
It marked the second time in five days that the committee postponed a vote on the legislation.
“We need to get tax relief to the taxpayers,” said state Rep. Hunter Greene, the committee’s chairman. “We’ve got to make sure that we have the money there to do that and to see what the alternatives are.”
State Sen. Nick Gautreaux, D-Meaux, has a different take on the delay.
Gautreaux sponsored the amendment in the Senate that would get rid of the state income tax.
“They keep delaying it because they don’t have enough votes to strip the amendment,” he said.
Greene, R-Baton Rouge, assured the House Ways and Means Committee Monday that SB87 will be heard.
A day earlier, on Mother’s Day, Greene informally polled members of the House about what type of tax cut they would prefer.
House Speaker Jim Tucker, R-Terrytown, said the likelihood that the House will abolish the state income tax is declining.
However, he said, he expects some form of long-term tax relief to emerge from the legislative session, which ends on June 23.
“We’re not interested in one-time. It will be recurring,” Tucker said.
SB87 originated as legislation that would revise some of the income tax brackets the Stelly plan changed.
The Stelly plan, named for the former legislator who drew up the measure, phased out state sales taxes on necessities while increasing income taxes for some wage earners.
Stelly divided wage earners into three tax brackets.
For individual filers, those brackets are:
* Income up to $12,500 is taxed at 2 percent. * Income from $12,500 to $25,000 is taxed at 4 percent. * Income over $25,000 is taxed at 6 percent.
The thresholds are doubled for joint filers.
SB87 would tax individuals who make between $12,500 and $50,000 at 4 percent.
Shaw said he wants the relief to be immediate rather than delayed.
http://www.americanpress.com/index.php?option=com_content&task=view&id=2619&Itemid=105
Income-tax vote delayed (5/13)
Multimedia
By JIM BEAM
AMERICAN PRESS
BATON ROUGE — An anxiously awaited committee vote on a proposed state income tax cut was put off again here today, but the House Ways and Means Committee chairman said the issue isn’t dead.
Rep. Hunter Greene, R-Baton Rouge, said it is his preference that the state income tax be eliminated altogether. That is how Senate Bill 87 left the upper chamber, and it is still in that posture.
Greene said the feedback he has received from his constituents agrees with his position.
Lawmakers have to adjourn by June 23, and Greene said that still leaves plenty of time to take action.
“We need relief for taxpayers,” Greene said.
However, Greene said there needs to be additional time for discussion and agreement on how to proceed with the tax break. He said it has to be determined whether the money is there to handle the tax cut.
Gov. Bobby Jindal hasn’t taken a stand on the proposed tax break, but he said any tax cuts would have to be accompanied with a similar amount of budget reductions.
Sen. Buddy Shaw, R-Shreveport, is author of SB 87, and it was a simple, one-page bill. Shaw wants to roll back state income tax increases enacted in 2002 when the Stelly Plan was approved.
Former Rep. Vic Stelly, a Moss Bluff independent, sponsored the plan as a way to eliminate onerous state sales taxes on food, prescription drugs and utilities. In exchange for removing those taxes, state income tax brackets were lowered to make up for lost sales tax revenues.
The state has enjoyed record revenues since hurricanes Katrina and Rita. Shaw said that makes it possible to restore the tax brackets to where they were before the Stelly Plan became law.
A spokesman for Gov. Jindal opposed Shaw’s bill in a Senate committee, saying the $302 million cost was too much to absorb at one time. Shaw said that opposition surfaced on the Senate floor and three amendments were drafted in an effort to derail the bill.
Meanwhile, Sen. Nick Gautreaux, D-Abbeville, came with a different amendment that phases out all of the state income tax over a 10-year period. It would eventually cost the state $4 billion a year by 2017.
Senators approved the amendment with a 19-18 vote and an effort to remove the amendment failed. The bill finally passed the Senate unanimously with 36 senators signed on as co-authors.
Shaw’s bill was heard by the Ways and Means Committee last Thursday, but Greene noted at the start that a vote would be delayed until Monday.
Shaw said he preferred that the Gautreaux amendment be removed by the House to restore his measure to its original form. However, he said he will push for passage either way.
Oh, yeah, let’s keep the state income tax - we can observe how well states that tax income do (e.g. La, Ms) and how poorly states that do not do (e.g. Tx, Fl). The jury is still out on this kid and I voted for him every time.
I am afraid Bobby Jindal is not as advertised. I too voted for him.
http://forgotston.com/2008/05/08/jindal-no-tax-cuts/
Jindal: No tax cuts! Thursday, May 8 2008
1 CB 7:38 am
Governor Bobby Jindal issued a press release yesterday about the use of the hundreds of millions in additional state revenues that will be reported on Friday by the Revenue Estimating Conference. (See release here.) That makes one question the independence of the REC since Jindal already knows the outcome.
As I understand Governor Jindal’s release, while calling for the leges to “curb spending,” he is calling for “investing” (government-speakfor “spend”) the new revenues.
Say what!
If I am to believe what the media has been reporting, it is the leges who have been attempting to “curb spending” by reducing the governor’s proposed state budget. It is the governor’s staff who is opposing their efforts. Perhaps the media has it backwards.
Building up surpluses
There is some merit to Jindal’s comments about replacing one-time dollars with recurring dollars. That is exactly what some members of the lege are attempting to do by reducing Jindal’s proposed state budget.
However, what Jindal does with the excess revenues doesn’t make any sense for one who claims to be a fiscal conservative who wants less government and money given back to the people.
Jindal says the state needs to build up a SURPLUS.
The state already has billions of dollars sitting in various “savings accounts” such as the proceeds from the “Tobacco Settlement” and the “Rainy Day Fund.”
One of the basic principles of government financing is that it should only take (i.e.,taxes and fees) from the citizens/taxpayers what is necessary to provide services for the citizens.
Jindal wants to premeditatedly take more money from the taxpayers than is necessary to run government to provide for “unanticipated needs that may arise in the future.” That sounds like an unconstitutional contingency fund. (See LA Const. Article III, Section 16(A))
No tax cuts!
Finally, for those who are still in doubt that Governor Jindal is behind the efforts to derail an effort to give some form of Personal Income Tax relief this session, this press release should disabuse them of that notion.
There is no money for tax reductions. Just the opposite. Jindal wants ALL of the state’s revenues to either spent on or saved for GOVERNMENT.
Throwing Bobby Jindal under the bus already. Faux conservative. Humph. And now we stand around and wonder stupidly why the GOP has ignored us conservatives and gone with McLame.
If you take the time to follow this particular debate now ongoing here in Louisiana, you will see quite plainly that Bobby Jindal is not as advertised.
The facts speak for themselves.
Maybe if all the states had 400-member legislatures and elected their governors every 2 years like we do here in NH, you wouldn’t have either a sales or and income tax and things would be more prosperous.
Not to brag or anything. /s
2. Was the amendment to end the income tax introduced by a conservative, or was it introduced by a liberal Democrat for nefarious reasons?
Looks like Jindal is going to be Louisiana’s maverick ala McCain. Jindal, who I voted for, was the best candidate running, but he was no conservative on tax issues. He said, during his first run for governor, that he wouldn’t repeal the Stelly bill. Thanks Bobby. I guess you can use the $1,000 better than I can. What next. Global warming changes like McCain is talking about?
Looks like Jindal is going to be Louisiana’s maverick ala McCain. Jindal, who I voted for, was the best candidate running, but he was no conservative on tax issues. He said, during his first run for governor, that he wouldn’t repeal the Stelly bill. Thanks Bobby. I guess you can use the $1,000 better than I can. What next? Global warming changes like McCain is talking about?
Otherwise, the state is throwing out money at this crap.
From The Advocate:
$75,000 for the city of Zachary for an economic development master plan.
$50,000 to the city of Central for economic development planning.
$25,000 for the Louisiana Arts and Science Museum operations.
$100,000 to improve the intersection at Florida and Sherwood Forest boulevards.
$400,000 to improve Coursey Boulevard between Airline Highway and Jones Creek Road.
$100,000 to improve the intersection at Jones Creek Road and Coursey Boulevard.
$25,000 for equipment for the Baton Rouge Fire Department.
$75,000 for the Pride Fire Department.
$50,000 for park improvements for the city of Denham Springs.
$50,000 to the McKinley High School Alumni Association for youth outreach activities.
$20,000 to the American Muslim Mission of Baton Rouge for a year-round farmers market in old south Baton Rouge.
What kind of water are they drinking in Baton Rouge? Representitives gone wild.
Does the GOP control both House and Senate in LA, since I saw that the House Speaker is an R? For me, it’s late and I need to go to bed, but I’m trying to see where one can blame Jindal for this particular bill stalling.
On second thought, I nearly fell asleep on my laptop so I’m going to reread this in the morning and hopefully I’ll get it on the second try. ;)
While you are correct that here in Texas there is no state income tax on personal income, I must mention that the state charges a ‘fee’ for just about everything except breathing. Also for businesses, there is a hefty ‘franchise’ tax which is assessed on a business’s revenue stream. This is a ‘de facto’ income tax on business.
For a business of any significant size, keeping up with the assorted fees & taxes that must be paid monthly, quarterly, ad nauseum requires a CPA. My CPA calls this activity the ‘Texas CPA Full Employment Act’.
It seems to me reasonable to cut spending too.....otherwize, funding will be found by taxing in some other method...and you'll be back where you started....
talk radio in Tennesee was very powerful a couple of years ago...
http://www.heartland.org/Article.cfm?artId=571
I guess we can expect a relentless posting of “Jindal is no conservative” from abb till people just give up arguing.
Bobby is the man!
He’s a lot better than Maw Maw.
Or until the scales fall from their eyes...
“It seems to me reasonable to cut spending too.....otherwize, funding will be found by taxing in some other method...and you’ll be back where you started....
So then why did Jindal and the Legislature earlier this year raise state spending by $1 billion?
http://www.nola.com/news/index.ssf/2008/03/state_senate_waives_spending_c.html
State senate waives spending cap; Jindal can spend additional $1 billion
by Ed Anderson
Friday March 14, 2008, 3:22 PM
By Ed Anderson
Capital bureau
BATON ROUGE — The Senate voted Friday 38-0 to break the existing spending limit for this year, allowing the Jindal administration to spend an additional $1 billion
snip
“He’s a lot better than Maw Maw.”
I agree. But he also said he would cut spending and taxes, but so far he’s not done that.
http://www.youtube.com/watch?v=2EgrnRnTfgk
Just curious who was your candidate during the governor race?
I fail to see how expecting tax cuts whenever government is flush with money - as is Louisiana right now - can be twisted into a 'government handout.' Just to remind everyone, it wasn't their money in the first place. The taxpayers earned it and it was seized by government under penalty of law.
Usually the type who posts such drivel like the post I'm replying to is drawing some sort of government check.
If Jindal wants spending cuts to go with the tax cuts, would it not be reasonable for his office to leading in proposing such cuts? It seems to me if he really wanted to reduce the size of the state government he’d be at the lead in this.
Too bad.
I voted for Jindal. And I voted for him four years ago. And I would vote for him again in a race against MeeMaw. But I expect him to carry through on his campaign promises to cut spending and taxes. Which so far he's not done.
Look it up. He's spent money so far this year like a drunken sailor but can't manage to return any to its rightful owners - the taxpayers.
Precisely. And he campaigned on that very issue. Watch the youtube clip. And look at what he’s done so far this year. Complete turnaround. And will persist in pointing out this hypocrisy.
Here’s where our money goes.
http://www.nola.com/news/t-p/capital/index.ssf?/base/news-6/121065620196690.xml&coll=1
Panel backs doubling (Louisiana) lawmakers’ pay
MAY 12, 2008 POLITICS / JOHN MAGINNIS
Take One Big Tax Cut at a Time
As citizens fill out their state income tax returns this week, many who itemize are happily surprised to see that they can deduct 57.5 percent of their mortgage interest payments and charitable contributions. With those deductions to be fully restored in two years, the repeal of the Stelly Tax Plan is well underway. Depending on what the Legislature does with taxes in the rest of this session, the much-taken-in-vain name of former legislator Vic Stelly could soon fade from the political lexicon.
It could be replaced, with honors, by that of Sen. Buddy Shaw, R-Shreveport. His bill to return income tax brackets to their pre-Stelly 2002 levels initially was given little chance of passage but has since taken on a life of its own. Over his objections, it was amended in the Senate to phase out the entire income tax over ten years. When Shaw’s proposed $302 million tax cut ballooned to $4 billion, House leaders called time out to slow down the runaway train before it collides with the budget.
At a time when richer, more progressive states are struggling with spiraling budget deficits, backwards Louisiana is reducing taxes while raising teacher salaries and pumping hundreds of millions of dollars into highway construction, universities and—a need uniquely ours—coastal restoration.
The causes of this happy peculiarity were examined at last week’s meeting of the Revenue Estimating Conference. It is a body of three state officials and a LSU economics professor, who, based on the analysis and recommendations of professionals, must unanimously agree on revenue projections that the Legislature will use to write the budget. This constitutional process replaced the old system, in which, basically, Edwin Edwards picked a number.
Recently, the toughest job for estimators has been to keep straight faces while they lowball predictions on oil prices. Every $1 uptick adds $12 million to the state treasury. So they have to play it ultra safe, because anyone around state government in the early ‘80s remembers the horror of revenue projections being caught on the wrong side of an oil bust.
With all due restraint, panel members pegged the oil price at $84 for the next fiscal year—motorists should be so lucky—resulting in $820 million more available for the current budget and the one beginning July 1. But if prices continue north of their current $125 per barrel, those estimates could be jacked up another half billion or so at the September meeting.
The new oil and gas boom sloshes all over the budget. Corporate income taxes driven by the energy sector have spiked. Six thousand well-paying extraction jobs have been added in the oil patch. Sales taxes have leveled off but have kept their high levels from recovery spending.
Then there’s the personal income tax, which makes up about a third of the state general fund and is steadily rising. Its recent growth is due less to the Stelly Plan, already factored in, than to workers making more money, and more workers reporting it. The number of resident tax filers is growing because, according to state economist Greg Albrecht, more are taking full-time jobs and getting W-2s instead working part-time, or intermittently, and taking cash under the table. That was the most encouraging comment I took from the whole meeting.
With the robust revenues, the Legislature can eliminate the $302 million in Stelly taxes and still balance the new budget with the use of some one-time money. That would still leave a healthy surplus for the current budget year, which can be plowed into another round of big highway projects, coastal restoration and debt service.
Sen. Shaw has asked and deserves to have his bill returned to its original form, minus the income tax repeal amendment. The repealers can come back with a clean bill of their own next year. By then revenue estimators might be more comfortable with—and we’ll be resigned to—stable triple-digit oil prices. But for now, to go any further any faster in cutting the tax base would be betting on the oil boom lasting indefinitely, which we promised ourselves never to do again.
You stop the spending but cutting the pay (in this case income tax)
Jindal has no political future in my mind. I was a big supporter, but he’s a disappointment.
Perhaps you haven’t seen this
http://www.2theadvocate.com/news/breaking/18929924.html
Jindal is a) backing the tax cut, and b) holding legislators accountable on pork.
Louisiana is very happy with Jindal’s leadership as a conservative.
...backing a $300 million tax cut but not the elimination of the state income tax.
That's "conservative"?
Also:
Jindal wants to delay the tax break....
That's "conservative"?
Rome wasn’t built in a day. Louisiana’s entrenched Democratic media machine is leaving out many key factors in this debate.
Long story short: Jindal wants to get rid of the state income tax, but won’t do it unless spending levels are cut.
Short story shorter: Sometimes you have to "starve the beast" - - cut taxes to force spending cuts.
Jindal should know this.
“Long story short: Jindal wants to get rid of the state income tax, but won’t do it unless spending levels are cut.”
So why did Jindal agree to this back in March? Were you not paying attention then? If not, why not? If you want to comment intelligently on Louisiana fiscal issues, you should study up. I’ve been paying the freight here for fifty years. I know how it works.
http://www.nola.com/news/index.ssf/2008/03/state_senate_waives_spending_c.html
State senate waives spending cap; Jindal can spend additional $1 billion
by Ed Anderson
Friday March 14, 2008, 3:22 PM
By Ed Anderson
Capital bureau
BATON ROUGE — The Senate voted Friday 38-0 to break the existing spending limit for this year, allowing the Jindal administration to spend an additional $1 billion
snip
http://jeffsadow.blogspot.com/
14.5.08
Jindal finally on board tax cut train, but paid high fare
Finally, almost a month later, Gov. Bobby Jindal finally jumped on the train spawned by state Sen. Buddy Shaw’s SB 87 which would provide a tax cut for middle-class households to the tune of $302 million a year. The wonder is why he didn’t leap early into the engine cab rather than catch onto the caboose, and what prompted him to do so?
Despite information showing excess state funds beyond what Jindal’s 2008-09 budget had anticipated, despite the House cutting spending that would have partially offset the “cost” of the cut, despite legislative criticism of some of Jindal’s spending plans, the most Jindal ever committed to on this bill was after initial opposition he agreed he would sign in it if commensurate cuts were made. Meanwhile, others perceived that in allowing a poison pill amendment that altered the bill to make it wipe out individual, estate, and trust income taxes over 10 years that would give Jindal an excuse not to sign it, Jindal really wanted to kill it.
This line of behavior, given Jindal’s stated desire to reduce the size of government and his goal of reducing or eliminating income taxes in the future, could lead only to two assumptions about Jindal’s thinking on the matter. One was Jindal had very serious concerns about looming budget deficits and the use of “one-time” money (generated from non-recurring sources like federal grants, even if they would be considered “recurring” under the state’s definition for budgeting purposes) to fund recurring commitments and even given his enthusiasm for tax relief he felt he simply could not do it.
However, Jindal never tried to make a public case to justify his opposition on these grounds, which either was a sign of poor political skill or implied the other potential motive, that Jindal really didn’t care about delivering tax cuts when he had a decent chance to do so. Whatever the reason, Jindal today announced his support for the original bill with only one change, beginning implementation in tax/budget year 2009 rather than 2008.
What changed Jindal’s mind? Was it irreversible momentum that made him go against his better judgment about the budget and/or skepticism about tax cuts? Did further review satisfy him that a 2009 start would not be imperiling state finances? Or was there some kind of deal made? (Maybe some of all of the above?)
If a deal is involved with the House and/or Senate, likely it would involve either or both of two things. One is with the issue of earmarks slipped into the state’s operating budget that Jindal promised to review very stringently, the other is legislator pay raises to among the highest in the nation and the highest in the South despite this being a part-time job in a state that underperforms in almost every way, which one might presume Jindal would oppose on the principle of smaller government.
The House and Senate may have threatened Jindal to send the amended bill through and dare him to veto it unless they got these kinds of concessions. If they did and Jindal blinked, in a few weeks he unenthusiastically will pursue these ends. Thus the people would suffer unwise spending if so in addition to Jindal’s squandering of political capital. But if he shows zeal with his veto pen, nothing may have been brokered.
Regardless, Jindal took a big hit to his reputation on his issue. In order for him to reassure a number of conservatives and reformers that heretofore have supported him, in the future he may have to be act more boldly more quickly than he had planned on their agendas.
posted by Jeff Sadow | 5/14/2008 03:15:00 PM
http://www.nola.com/news/t-p/grace/index.ssf?/base/news-0/121082945440410.xml&coll=1
Jindal grabs the reins
Thursday, May 15, 2008
Stephanie Grace
File this tidbit away: Eliminating the Stelly tax increases was not Gov. Bobby Jindal’s idea.
It’s worth remembering, if only for the sake of historical accuracy, that the income tax reduction Jindal now fully supports was not part of the governor’s legislative agenda until Wednesday.
In fact, Jindal’s administration used to be so skeptical of slashing revenues by $300 million a year, absent one-for-one spending cuts, that it tried to kill the popular measure in committee.
snip
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.