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Beam: Cheap advice could be costly

Last Modified: Wednesday, April 17, 2013 5:53 PM

By Jim Beam / American Press

It’s amazing how some national organizations are so quick to offer advice to Louisiana’s political leaders. Unfortunately, they rush to judgment because they are either unaware or don’t really care about the internal problems facing the state. We have health care issues, budget shortages and a higher education system on the financial ropes.

Americans for Tax Reform, the group that Grover Norquist made famous with his “no-tax” pledge, praised Gov. Rick Perry of Texas in a Tuesday news release while chastising Louisiana lawmakers for abandoning repeal of the state’s individual income tax.

“Gov. Perry moves to make Texas more tax friendly,” ATR said, adding, “Meanwhile legislators in Baton Rouge are thwarting Gov. (Bobby) Jindal’s attempts to do the same.”

The National Taxpayers Union a day earlier wrote an open letter to members of the state House Ways and Means Committee, urging them to support legislation lowering or repealing income taxes.

“... Reducing — or completely eliminating — income taxes would make Louisiana a better place to start a business and would allow taxpayers to keep more of their hard-earned money...,” NTU said.

If those remarks sound familiar, it’s because Gov. Jindal has been saying almost the exact same thing for months now in his unrelenting pursuit to repeal state income taxes.

In an earlier column, we talked about the American Legislative Exchange Council’s influence on the national political scene. It was formed in 1973 by conservative activists in order to take conservative policies to state and local levels. It has written some 800 model bills that can be used by governors and legislators anywhere, and conservative political leaders in a number of states have been quick to take advantage of the service.

National organizations do offer some helpful advice, but they seldom dig deep enough to determine whether what they recommend is workable in different situations. The same isn’t true for in-state groups that are thoroughly familiar with their state’s internal affairs.

Louisiana is fortunate to have a number of organizations attuned to the state’s needs, and they are doing what AFR, NTU and ALEC can’t or won’t. Two of the most credible are the Public Affairs Research Council and the Council for a Better Louisiana. Both are nonprofit, non-partisan, statewide groups. PAR was founded in 1950, and CABL in 1962.

PAR has released a detailed report outlining key tax issues facing the state. It said Gov. Jindal’s plan to repeal income taxes could have resulted in more than $4 billion in lost revenues and other costs. PAR said talk about not having an immediate plan to replace those revenues “lacks courage and real leadership.”

“... It is doubtful that the (Jindal) plan would have provided a simpler, fairer or more evenly applied tax system, which are primary goals of a good tax policy,” PAR said.

The PAR report should be a must-read for every Louisiana legislator and others involved with the state’s tax policy. It is available online at www.parlouisiana.com.

CABL makes equally convincing arguments that repeal of income taxes is too serious an issue to be rushed for political reasons. The council lists five things to think about before rushing to repeal the state income tax.

Louisiana is already a low-tax state, it said. The state has already cut spending by $2 billion since 2009. Future budgets don’t look good because of rising Medicaid and retirement costs. There are “no more rocks to look under to find more dollars.” And CABL adds that funding for higher education has turned upside down.

Then, there was this comment: “If voters are dying to continue cutting state support to critical areas of state government in exchange for the elimination of income taxes, they seem to be keeping it a secret.”

State legislators are closer to tax issues than any of those national organizations pushing income tax repeal, and they say this isn’t the right time. Louisiana House Republicans, who represent a majority in their chamber, have supported Rep. Joel Robideaux, R-Lafayette, chairman of the House Ways and Means Committee. He asked sponsors of income tax repeal legislation to indefinitely defer their bills, and they agreed.

Robideaux also got support from Speaker of the House Chuck Kleckley, R-Lake Charles. He agreed with others that it would be fiscally irresponsible to eliminate the income tax without replacing the revenue.

Rep. Lance Harris, R-Alexandria, and chairman of the GOP House delegation, said, “While repeal of the income tax is a significant Republican goal, most of our members were concerned about how to pay for the billions of dollars in lost revenue.”

Rep. John Bel Edwards, D-Amite, and leader of the House Democratic Caucus, said, “There’s a lot of support here for eliminating the income tax. But how do you pay for it?”

Edwards told The Lens of New Orleans a study commission could be created to study over the next two years how to eliminate the income tax. PAR agreed, saying there needs to be a realistic approach to reforming the state’s tax system.

CABL said, “... Incremental progress is slower and more deliberate, but it’s still progress.”

Our advice to those outside organizations trying to tell the state what to do about its taxes would be, “Thanks, but no thanks. The governor may like your advice, but our legislators have a better handle at this time on what’s best for Louisiana.”

    • • •

Jim Beam, the retired editor of the American Press, has covered people and politics for more than five decades. Contact him at 494-4025 or jbeam@americanpress.com

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