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Gov. Bobby Jindal. (American Press Archives)

Gov. Bobby Jindal. (American Press Archives)

Tax change talk produces limited results

Last Modified: Friday, June 07, 2013 4:49 PM

BATON ROUGE (AP) — Talk was big in the months leading up to Louisiana's legislative session about revamping the state's tax structure, putting limits on tax breaks and raising taxes on cigarettes, as most other states have done.

None of that got accomplished.

For a "fiscal session," very little movement was made on taxes in the session that ended this week.

Gov. Bobby Jindal's sweeping tax overhaul flamed out before a single vote was ever taken. New or expanded tax breaks continued to win passage. And smokers won't face any change to the price of their habit.

Lawmakers point to small strides as progress. They say proposals to dole out tax exemptions, credits and rebates are getting tougher scrutiny, and they say the Legislature is interested in looking at changes to the state's tax structure.

"I think it was a positive discussion to get started, and it's a discussion that we need to be having. However, it is not an initiative that we ought to take in a way that does not ensure we're doing so with precision and knowing exactly what the outcome will be," said Rep. Chris Broadwater, R-Hammond.

Sen. Robert Adley, R-Benton, said he believes a legislative study group that met for months to comb through billions of dollars in state tax breaks has raised attention.

"That opened a lot of eyes. All of us are always for tax credits to create jobs, but we finally came to the conclusion that when we create one job, we're taking money from one taxpayer to get another one on the payroll. These credits need to be generating income for everybody and not just a few," Adley said.

Lawmakers made only modest changes to tax break programs in response to the study, however.

They put a 2018 expiration date on Louisiana's generous solar tax credit program and added new limits to the credits that can be taken before the program ends. They put caps on a program that pays vendors a percentage of the sales taxes they collect and remit to the state. They placed new limits on the state's alternative fuel vehicle tax credit program — though the changes already had been done through administrative regulations earlier in the year.

And they changed the Enterprise Zone program to prohibit credits to big-box retailers in the targeted disadvantaged zone and to require eligible companies to provide full-time jobs and hire a larger number of area workers.

As they trimmed some areas, lawmakers added new tax breaks and widened existing ones.

A port investment tax break was broadened to increase eligibility. The state sales tax on gold and silver currency and bullion was eliminated. Tax credit programs for historic rehabilitation, sound recording and theatrical infrastructure projects were extended.

Jindal hasn't yet made a decision on the various tax change bills, but he said he can support limits to existing tax breaks if the dollars raised are then offset by tax cuts elsewhere.

It seems lawmakers might have met that hurdle.

"As long as there's not a net increase in taxes, we'd be open to looking at those tax credits globally," Jindal said this week.

In a new twist, lawmakers stopped dozens of other proposals amid concerns about their price tags. In past years, many of those types of bills received quick and easy passage, as legislative sponsors talked of the hundreds or thousands of jobs they predicted would follow.

"We have made some step forward. People are beginning to see (tax breaks) in a different light, and it takes time to get to some reform with that," Adley said.

In many instances, opposition to a new or expanded tax break was led by Republicans, who have traditionally sided with business groups to support such programs.

"At what point do we stop giving away our revenues?" said Rep. Jay Morris, R-Monroe, in one House debate over a tax break proposal.

Senate Finance Committee Chairman Jack Donahue, R-Mandeville, led the push to create the tax break study group. He said one of his top disappointments of the legislative session was that lawmakers didn't put limits on a pricey tax break program for film and TV productions.

The state spent $223 million for film tax breaks last year, according to a legislative audit, and the price tag has been growing annually.

But film industry leaders again managed to escape a legislative session with their tax break program intact. Recommended changes went nowhere amid threats that limits on the tax breaks could squelch film and TV production in Louisiana and cost the state thousands of jobs.

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