Jindal to get tax cut bill

• By WILL SENTELL
• Advocate Capitol News Bureau
• Published: Jun 11, 2008 - Page: 1A - UPDATED: 12:05 a.m.

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A bill that would initially cut state income taxes by $359 million per year won final legislative approval Tuesday.

The measure, Senate Bill 87, cleared its last legislative hurdle when the Senate passed it 38-0.

The same measure breezed through the House last week 102-0 and now goes to Gov. Bobby Jindal, who earlier endorsed the proposal and called the Senate action “terrific news.”

The tax cut would take effect in 2009 through major changes to the Stelly amendment, a constitutional measure that voters approved in 2002. That 2002 amendment overhauled Louisiana sales and income taxes.

However, critics have complained for years that some taxpayers were stuck with excessive tax increases that need to be trimmed amid booming state revenue.

“This is a very wonderful deal,” said Sen. Buddy Shaw, R-Shreveport and sponsor of the bill.

But Sen. John Alario, D-Westwego, said some taxpayers in lower brackets will be surprised to learn they save little or nothing under the bill.

Single tax filers would have to make $95,000 per year to get the maximum savings of $500. Married tax filers with a $150,000 combined income would save $1,000.

Critics have noted that roughly half of the state’s 1.6 million tax returns will see no benefits from the bill.

Shaw repeatedly said that taxpayers would face the same income tax tables that they did before voters approved the Stelly amendment six years ago.

“I have no idea what most people will get or not get,” he said.

The tax cut would take effect Jan. 1. Taxpayers could notice changes in withholdings starting six months later and the full effect of the measure would be noticeable when tax returns are filled out in the spring of 2010.

The tax cut would trim state revenue by $359 million for the financial year that begins on July 1, 2009, then drop to $251 million, $262 million and $273 million in subsequent years, according to state financial estimates.