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Sunday, November 22, 2009
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Tax amnesty brings in more than expected
Patrick Dennis/The Advocate
Gov. Bobby Jindal discusses on Wednesday at the State Capitol the collections for the 2009 Louisiana Tax Amnesty Program and he comments on the state’s reaffirmation to give $30 million toward LSU’s planned Business Education Complex while LSU E.J. Ourso College of Business Dean Eli Jones, left, and Phelps Dunbar law firm partner Richard Matheny, right, look on.
Amnesty program windfall
The state has collected $303.7 million from delinquent taxpayers.
The money paid:
- $277.7 million from businesses.
- $ 26 million from individuals.
Source: Louisiana Department of Revenue
Louisiana’s latest tax amnesty program generated more than twice as much money as state officials expected.
Gov. Bobby Jindal announced Wednesday that delinquent taxpayers paid $303.7 million — more than double the $150 million anticipated.
“The program has generated a significant amount of money that will go towards providing critical services for our people during a challenging budget cycle,” Jindal said.
The two-month long program, which ended on Halloween, waived half the interest owed if state taxpayers settled their accounts in full.
State officials still are tallying the numbers so the $303.7 million could climb.
The use for part of the proceeds already is decided. Legislators agreed earlier this year to put $90 million into a coastal fund and to use $86 million to replenish the state’s “rainy day” fund. A California company that helped with the program also must be paid.
Lawmakers borrowed from the “rainy day” fund to help balance the state operating budget. The fund was set up to tide the state over during financial shortfalls.
Jindal said he wants to spend the rest of the money — about $127 million — on health care, which is facing a massive budget shortfall.
Previously, the Jindal administration expressed concern about using nonrecurring tax amnesty money for ongoing expenses such as health care.
However, Jindal said Wednesday he is convinced that a lot of the money in the amnesty program comes from taxpayers who now will pay their taxes every year.
A $308 million shortfall is projected for the Medicaid program in the current fiscal year that started July 1. Some 1.2 million Louisiana residents rely on Medicaid for their health care coverage.
The shortfall is expected to grow next budget year when the federal government plans to reduce the amount of money it pays into the Medicaid program, forcing the state to pick up more of the cost.
The next step in using amnesty money for health care, Jindal said, is for the Revenue Estimating Conference to declare that a portion of the amnesty program revenue is recurring.
The conference decides how much money the state has to spend.
The Legislature also would have to agree to Jindal’s plan.
Jindal noted that Louisiana’s amnesty program collected more money than similar programs in Nevada and Oklahoma.
The Governor’s Office said Nevada collected about $41 million and Oklahoma’s program generated $82 million.
So far, the state has waived abut $21 million in penalties and interest, said Byron Henderson, spokesman for the state revenue department.
He said the agency still is counting money even though the program is over.
“We are continuing to process applications and payments and the numbers are likely to continue to rise during the next few weeks,” he said.
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