COMMON CAUSE URGES JINDAL TO DELAY TAX PLAN
Louisiana Common Cause says Gov. Bobby Jindal needs to slow down his tax swap plan until he can get his priorities and figures straight.
The nonpartisan organization, which is dedicated to improving state governmental processes, notes that Jindal just recently has had to sharply increase the rate of his sales tax proposal and had to revise how various interest groups would be treated. Now, there are conflicting reports as to whether even the latest uptick in the proposed sales tax rate will be enough to balance out the loss of state income tax revenue.
“This tax swap is not a solution,” said Louisiana Common Cause President Kay Zimmerman. “It’s a smokescreen. Our real problem is the $1 billion budget deficit this year and more thereafter. The tax plan won’t decrease the budget deficit by even a penny. It’s supposed to be revenue neutral so all it really does is shift the burden from one group to another. The legislature and the governor need to focus on the immediate problem, not on some pie in the sky idea that’s being pushed by outside groups and doesn’t even address the problem.”
Zimmerman said her organization strongly suggested the governor take the time to get the expert economic opinions needed for such a complex swap. She also said affected groups need to be included in the process so that the state can avoid another lengthy courtroom battle.
“We’d like to see him defer this proposal until the next legislative session so that everyone can have input,” she said.
Common Cause noted previous “reforms” of state ethics laws, charter schools and vouchers, and teacher evaluations were rushed through the legislative process. “Now we have a confused and poorly functioning ethics enforcement system, and a new retirement and two new education programs declared unconstitutional,” she added.
“The state needs legislation that works, not legislation that ends up in costly lawsuits before being overturned by the courts. “
The governor’s revised tax plan, which he intends to push when the session starts on April 8, calls for the state sales tax to increase by more than 56 percent, from 4 to 6.25 percent, making total sales taxes among the highest in the nation. When coupled with municipal sales taxes, many citizens would find the tax on their purchases to be higher than the 10 percent tithe ordained by their religion.
Because Jindal’s plan would raise the tax burden on the poor and lower middle class, he has suggested a complex series of rebates to those below a designated poverty line. Retired state workers currently pay no state income tax and thus would see their retirement benefits adversely impacted by the proposed income tax/sales tax swap, and Jindal has also proposed a rebate for them, but only for those with lower incomes.
Zimmerman noted Jindal’s plans have attracted widespread opposition from groups as diverse as the Public Affairs Research Council, the Louisiana Association of Business and Industry and two coalitions of ministers.
“To make matters worse, despite the closeness of the session opening date, the Administration is still tinkering with important details,” Zimmerman noted. “Even the Governor’s chief legislative sponsor publicly admitted ‘I’m not arguing that there’s . . . not a lot of fixes that need to be made.’”
“There simply is no legitimate reason for rushing such a huge and potentially disastrous change in our tax structure,” she concluded.