Tax cuts will be on legislative agenda

• By MICHELLE MILLHOLLON
• Advocate Capitol News Bureau
• Published: Apr 27, 2009 - Page: 1A

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A sour economy and a state budget shortfall are not deterring lawmakers from proposing hundreds of millions of dollars in tax breaks.

Hundreds of the bills filed for consideration in the session that starts at noon today deal with tax relief, especially for retirement income, businesses, alternative energy, hurricane-related expenses and property.

There is legislation to eliminate the state individual income tax, attract the automobile racing industry and encourage the purchase of handheld breathalyzer devices. The state’s youngest lawmakers want to give recent college graduates a break on their income taxes. A senior legislator is targeting property owners, 65 and older, for tax relief.

Some of the proposals carry hefty price tags. A tax credit for businesses’ health insurance premium costs would reduce state revenue by $244.5 million a year. Other legislation is narrowly drawn and relatively miniscule in price. Exempting community theater tickets from sales tax, for example, would cost state government $84,000 a year.

The state general fund already is expected to drop by $1.3 billion because of lower oil prices and slumping tax collections.
The state operating budget is expected to drive the session. Gov. Bobby Jindal is recommending cuts to health care and higher education in his $26.7 billion state operating budget for the fiscal year that starts July 1. Health-care provider rates could be cut. Colleges could lay off workers.

State Rep. Jim Fannin, D-Jonesboro and chairman of the House budget committee, said there is not enough money for the state’s needs, much less what it wants.

“I don’t know how, in the time that we’re in, that members continue to think that we can reduce our revenue. Some members don’t totally realize the condition of the economy of the state and the nation,” Fannin said.

Senate President Joel Chaisson II, D-Destrehan, said the state already is struggling with the loss of revenue from an income tax break passed last year.

“If we learned anything from that experience, it ought to teach us a lesson that we don’t want to repeat the same mistakes,” Chaisson said.

State Rep. Hunter Greene, R-Baton Rouge and chairman of the House tax committee, said lawmakers are not delusional about state government’s money problems. He said legislators are proposing what their constituents are requesting.
“I certainly don’t think the Legislature’s crazy ... We’re the voice of the people,” Greene said.

House Speaker Jim Tucker, R-Terrytown, said an argument can be made that lowering taxes strengthens the economy.
“A number of members believe tax credits will stimulate the economy,” he said.

Jindal included a handful of tax breaks in his proposed budget. He wants to continue offering tax credits for research and development, investment, and entertainment projects.

He said he expects legislators to be fiscally responsible with their tax relief proposals by ensuring they are phased in and part of a balanced budget.