Revenue bills move in the House, but what are the chances of Reform?


This week the House Ways & Means Committee moved on a host of bills dealing with revenues after two days and many hours of discussion. It was a positive and necessary step for those who favor comprehensive tax reform, but whether it really means much of anything is uncertain.

The bills run a pretty wide gamut dealing with individual and corporate income taxes, sales taxes, and even a single piece of legislation that seeks a wide reform of all of those taxes in one big bite. But outside of that bill, HB 355 by Rep. Barry Ivey, there’s not much in the way of a comprehensive reform package to discern.

Certainly, if House members were to get the urge to reform and improve the state’s tax structure, there are now instruments on the House floor to do that. But in many cases the bills themselves aren’t exactly on point to accomplish what many reformers want and a lot of those that could do that are tied up as part of an all-or-nothing package that many would probably find hard to swallow at this stage of the game.

So where does that leave things? At this point it’s hard to say. There isn’t much evidence of an appetite for meaningful reform on the House side and that’s the only side that counts right now. It’s important to note that this session could end without any reform and the sky wouldn’t fall. Our tax climate wouldn’t get any worse than it already is and most legislators believe there’s enough money to balance this year’s budget without any additional revenues.

So the sentiment seems to be, what’s the rush?
Well, the rush is that they may be able to balance the budget this year, but they will have what many believe is an impossible task next year when more than a billion dollars in temporary taxes fall off the books. If you don’t address that revenue issue this year during the current legislative session, the only way to do it and avoid the cliff is during a special session sometime later.

What will make things different then is hard to say, but the chatter about an inevitable special session appears to be growing – and perhaps even a constitutional convention. That one still seems like a longshot, but at some point Louisiana has some serious issues it needs to address. The highest sales tax rates in the land, credit downgrades, critical infrastructure needs, and sliding tax climate rankings don’t provide the best optics to those looking at our state for investment.

One of these days we need to step back and look at the big picture – and at some point we probably will – but it’s not looking like this will be the legislative session where that happens. And that’s unfortunate.

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