When the new state administration takes over in January, they will face the same old structural budget deficits. A report just issued by the Committee of 100 -- in consultation with the Public Affairs Research Council, the Council for a Better Louisiana, and the Louisiana Budget Project -- is proposing some fixes for the problem.
“Our plan is really focused on the long-term view; to address creating a more stable and predictable fiscal structure for the state of Louisiana,” says Tom Clark, chairman of C100.
The private non-profit, statewide business roundtable commissioned the study from the Tax Foundation. It looks at Louisiana’s revenue streams -- sales tax, personal and corporate income tax, property tax – and suggests ways to improve them.
“What we believe the report does is to provide a number of options, alternatives to consider, and provide a way for our legislators and the public to engage in a greater dialogue,” Clark elaborates.
Top of the list is unifying state and local income tax bases, while setting up a single point of collection. It’s a politically prickly proposal, as current parish tax collectors are the sheriffs.
The report also suggests the state go to a flat rate for both personal and corporate income taxes, and do away with the business inventory tax. Clark says that’s going to be one of the toughest things to do.
“The inventory tax factors into the way a lot of local governments have financed their current and future operations, and so there is definitely no quick and easy way to resolve this.”
Clark cautions this report is about long term structural tax changes, not about filling today’s budget holes.
“Definitely it will take more than one legislative session, or possibly one gubernatorial term.”
Clark says the next step is to take the report on the road, and consult with local officials, business owners and legislators, to start building consensus before tackling revisions to the state tax structure.