Tax Deduction Limits Hit a Wall
On Wednesday, House Ways and Means took up tax-raising measures that could help fill the $600 million budget gap the state is facing next fiscal year, which starts July 1.
Some who support raising revenue offered testimony on the needs next year's budget doesn't meet.
Ashley McReynolds' son receives waiver services, but she says, “there was just not enough money to fill all of the needs of people with disabilities. Tens of thousands of families are still without services.”
Mike Ranatza, Executive Director of the Louisiana Sheriff’s Association, said “we’re not making a selfish pitch to you based on the $15.3 million that we’re dependent upon to run jails. We need this revenue, as does education and healthcare.”
LSU President F. King Alexander called the reduction in funding devastating for the university, adding that "the TOPS hit is doubly devastating, disproportionately devastating for LSU and our students.”
Scott Richard, Executive Director of the Louisiana School Boards Association, re-iterated the notion that funding education should be a priority. "We’re not selfishly asking for money for K-12," he said, "it takes all of us working together, because it’s about the community improving. It’s about improving our state."
One plan, HB 11, would reduce the amount of excess federal itemized deductions allowed on state income tax returns from 100% to 57.5%, and raise nearly $117 million for next fiscal year.
"It’ll only affect those who make $103,000 [per year] or more. 76% of the people will not be affected," explained the bill's author, Representative Rob Shadoin (R-Ruston).
An amendment tied Representative Shadoin’s bill to Representative Julie Stokes’ (R-Kenner) tax reform bills, which reduce the personal income tax rates and change the tax brackets. Representative Stokes called the move a compromise, presenting "a tremendous opportunity to bring together both sides of the aisle right now."
After four hours of debate, the committee voted 10-9 to involuntarily defer the bill. Chairman Neil Abramson, a Democrat from New Orleans, cast the deciding vote against the bill, stopping it from moving to the full House.
House Bill 11 was one of the Governor’s specifically requested items for this session.