Tax amnesty lucrative for state

• By MICHELLE MILLHOLLON
• Advocate Capitol News Bureau
• Published: Nov 5, 2009 - Page: 1A

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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 toward providing critical services for our people during a challenging budget cycle,” Jindal said.

The two-month 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 figure 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.