Committee delays review of tax plan

04 04, 2013 by The Advocate

Louisiana House Speaker Chuck Kleckley said Wednesday that the governor’s tax package is on hold until economic experts can clear up the confusion surrounding the plan’s numbers.

Kleckley, R-Lake Charles, said he wants the Legislative Fiscal Office to review the bills, an exercise that likely will delay debate on the governor’s initiative for weeks.

The nine-week legislative session begins Monday.

“If it’s going to have an impact on small business or any business ..., it’s going to be hard for me to support that,” Kleckley said of the governor’s plan to eliminate state income taxes, raise the state sales tax rate and tax currently untaxed services.

The Jindal administration already said the proposal would shift a $500 million tax burden from individuals to businesses. After that announcement, the state’s largest business lobbying group warned that its support is unlikely.

Religious leaders, House Democrats and a Baton Rouge-based public policy group also raised concerns.

A repeated criticism is that the numbers do not support the governor’s assurances that his plan sufficiently would replace $3 billion in income taxes without affecting a state budget that funds health care, colleges and other public services. Another worry is that the plan would raise taxes on the poor and middle class while lowering taxes on the wealthy.

House Speaker Pro Tem Walt Leger III, D-New Orleans, said legislators are concerned about increasing the state sales tax rate from 4 percent to 6.25 percent.

“I don’t think anything’s going to sail through. I never did. They’ve got a lot of work to do to see if there’s some way to reach consensus,” Leger said.

Gov. Bobby Jindal was in Alexandria on Wednesday, pushing his tax plan before the Rotary Club before traveling to Mississippi to dine with the Mississippi Republican Party.

The governor declined to come to the phone to discuss the uncertainty surrounding his tax plan. Instead, he released a statement defending his proposal.

“The session hasn’t started yet. We’re in the process of working with legislators and the LFO to analyze the data and get on the same page. The bottom line is getting rid of income taxes will create jobs and more opportunities for our people,” he said.

At the same time Kleckley was meeting with State Capitol reporters at an annual, pre-session luncheon, Jindal’s press office issued a two-page release on the top reasons to eliminate income taxes. Among the nuggets was that states without income taxes have seen higher population growth than the national average.

The House Committee on Ways and Means was supposed to meet Wednesday morning to continue reviewing the tax plan. Instead, that meeting was canceled.

Legislative aides phoned committee members Tuesday night to tell them not to drive to the State Capitol the next day.

“It was abrupt. I can tell you how abrupt it was. I’d finished my day (before I found out),” said state Rep. Robert Johnson, D-Marksville and a committee member.

Kleckley said there is no reason to hold debate until legislators have “accurate, hard, believable” numbers.

The Jindal administration hired a national accounting firm to help with the plan and released numbers on how much would be generated by tinkering with the tax code. However, at least one key detail has changed. After backing a 5.88 percent state sales tax rate, the governor abruptly increased it to 6.25 percent shortly before Easter weekend.

“I was told 5.88 was the number and then I find out ... the number’s going to 6.25,” Kleckley complained.

House Democratic leader John Bel Edwards, of Amite, said he suspects the package could not get out of committee at this point.

Edwards said the Jindal administration either needs more time to convince the public or more time to develop an alternative plan.

“You don’t call time out when you’ve got the ball inside the 5-yard line and you’re about to score a touchdown,” he said.

Earlier in the week, state Rep. Joel Robideaux, who is sponsoring the plan for the governor, said he could not proclaim the plan revenue neutral.

Robideaux, R-Lafayette, did not return phone calls and a text message seeking comment Wednesday.

“We’re on the same page. We’re moving in the same direction,” Kleckley said of Robideaux’s role in handling the tax package.

That direction, he said, is to wait and see what the Legislative Fiscal Office computes.

The office is staffed with budget analysts and two economists who estimate the fiscal effect of legislation. The office’s work on the bills is expected to take another two weeks.

“I want to see the Legislative Fiscal Office’s numbers before deciding where we’re going,” Kleckley said, adding that he cannot see into the future to predict the package’s fate.