LABI talks details of proposed tax reform

By By John Guidroz / American Press

An official with the Louisiana

Association of Business and Industry said Tuesday that LABI will keep a

close eye on Gov. Bobby

Jindal’s tax reform proposal and will spend time during this

year’s legislative session defending the education and workers’

compensation reform measures approved last year.

Jim Patterson, LABI vice president of

governmental relations, told local business leaders at a luncheon, that

LABI has no

position on Jindal’s tax reform efforts because no legislation has

been filed. The governor’s plan includes removing personal

and corporate income taxes and increasing sales taxes.

“We welcome discussion along these lines,” Patterson said.

The tax reform proposal would include removing $2.58 billion in individual income taxes and about $340 million in corporate

franchise and income taxes from the state’s budget, Patterson said. He said the state’s 4 percent sales tax rate “will go

up to some degree” to reach a point where revenue is neutral.

“The last (increase) I heard was 1.78

(percent), but that depends on what other areas they are able to find

taxes from,” Patterson

said.

Patterson said the proposal also

includes increasing taxes on cigarettes, removing severance taxes and

removing certain sales

tax exemptions. But there will be no increase or removal of

exemptions for food, prescription drugs or fuel. Sales tax exemptions

for manufacturing and machinery, commercial and residential

utilities and purchases by state and local agencies will also

be left alone, Patterson said.

Patterson said Jindal wants to expand

the state’s sales tax base and has mentioned Texas as an example. He

said Jindal is

considering taxing tickets to movie theaters, cable and television

services, Internet access and home security services. Services

like pest control and landscaping would also be taxed.

Sen. Dan “Blade” Morrish, R-Jennings, said he is not sure if the state needs tax reform, but it may “need some tweaking.”

“If you look where we are with national watchdog groups, Louisiana seems to fall in a good position,” he said. “Until we know

what’s on paper, it’s hard to discuss.”

Morrish said tax reform “doesn’t fix, change or balance the budget,” and that it is a separate issue from balancing the budget.

House Speaker Chuck Kleckley, R-Lake

Charles, said higher sales tax fees could put Calcasieu Parish “at a

competitive disadvantage

with Texas.” He said he expects Jindal to deliver legislation

“within the next seven to 10 days.”

He said the House Ways and Means Committee is expected to review the measure March 19, several weeks before the legislative

session begins April 8. He said the tax reform measure requires a two-thirds vote in the House and Senate.

“We feel this is a very complex bill,” Kleckley said. “We’re going to have plenty of time to hear both sides of the story.”