Beam: Tax repeal on reckless path

By By Jim Beam / American Press

The Louisiana Legislature could be on

the verge of eliminating the state’s personal income tax without any

plan to replace

the lost revenues. What a monumental mistake that would be. That

is exactly what lawmakers did five years ago when they repealed

the Stelly income tax increases that were designed to replace

missing sales tax dollars.

You couldn’t get the governor and legislators to publicly admit they made a mistake in 2008, but many lawmakers have privately

talked about what a costly error that was and how it has come home to roost.

The repeal cost the state $359 million

in revenues in 2009 and over a billion dollars more since that time. So,

no one should

be surprised that state agencies have had to deal with mid-year

budget cuts during the five years Gov. Bobby Jindal has been

in office.

Once the anti-Stelly sentiment cranked

up in the halls of the Legislature, it spread like wildfire. The

governor jumped on

the bandwagon late. And when he did, lawmakers tripped over

themselves to get on board. Everyone forgot the Stelly plan also

wiped out nearly $300 million in sales taxes on food, residential

utilities and prescription drugs.

The votes during the 2008 session to repeal the Stelly plan were unanimous. If you put the repeal of a tax on the legislative

calendar, only the most daring legislators are brave enough to oppose it. And as most of us know, there aren’t too many of

them around when the governor becomes the chief engineer on the repeal train.

Over a dozen bills designed to repeal or reduce the state’s income tax are on the Monday agenda of the House Ways and Means

Committee. That is where all tax matters begin their trek through the Legislature.

Both Gov. Jindal and Speaker of the

House Chuck Kleckley, R-Lake Charles, talked about income tax repeal

after legislators

adjourned for the weekend. Kleckley was first, and said he

supports a 10-year phaseout of the personal income tax, and the

lost revenues could be replaced at a future session. Minutes

later, the governor agreed, saying he wouldn’t put up any barriers,

even if lawmakers don’t come up immediately with a way to replace

the missing dollars.

It is believed both men favor a repeal bill sponsored by Rep. Hunter Greene, R-Baton Rouge. Greene offered a similar 10-year

income tax phaseout measure during the 2011 legislative session that didn’t go anywhere.

Greene is on the same page with Jindal

and Kleckley. The trio is saying let’s get this income tax off the

books, and we can

worry about how to pay for it later. It sounds exactly like that

Fram auto oil filter commercial years ago that ended by saying,

“You can pay me now, or pay me later.” Buy an inexpensive oil

filter now or you’re going to end up paying hundreds of dollars

later to replace the car’s engine.

Greene talked to The Lens, which

describes itself as the New Orleans area’s first nonprofit, nonpartisan

public-interest newsroom.

“Instead of looking at a projection of how much (money) we’ll need, we can use actual collections to see the gap,” he said.

“We can then look at cuts in spending or look at finding other sources of revenue.”

Rep. Alan Seabaugh, R-Shreveport, is author of another income tax phaseout bill that wouldn’t become effective until 2016.

He told The Lens pretty much what Greene said.

“We have 12 years to figure it out,” Seabaugh said. “Let everybody know it’s coming, and we’ll work it out.”

Talk about wishful and reckless thinking. The lost income tax revenues need to be shored up now.

Listening to these promises about taking care of revenue losses in years to come reminds us of those early American salesmen

who peddled fake cures from their medicine wagons.

The Oregon Center for Public Policy on a different issue put it this way: “Watch out Oregon, the snake oil salesmen are rolling

into town, with old medicine in a new bottle.”

Louisiana’s House Ways and Means Committee should give the dozen or more income tax repeal bills extremely close scrutiny.

It would be akin to committing fiscal suicide to let legislation get out of committee that doesn’t have some mechanism to

replace lost revenues. Anything less would be totally irresponsible.

Economics professors at LSU (Jim Richardson), Tulane (Steven Sheffrin) and the University of New Orleans (Tim Ryan) make even

more sense. They said in an op-ed piece in The Times-Picayune they believe the state has a workable and competitive income

tax structure and it would be a mistake to repeal it.

Rep. Joel Robideaux, chairman of Ways

and Means, has questioned the wisdom of eliminating one source of

revenue without coming

up with a replacement. He told The Lens it wouldn’t be a prudent

thing to do to a state budget that is already unstable. The

question is whether he and his committee members will be able to

stand up to the pressure they will get from Jindal, Kleckley

and others to repeal the tax and worry about lost revenues later.

The citizens of Louisiana can only hope lawmakers don’t repeat the mistake the previous Legislature made five years ago when

it repealed the Stelly plan. The state has been in a financial bind ever since.

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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