Wednesday, Sept. 11

Wednesday, Sept. 11

Sales tax collections down; income tax collections up; Income inequality at greatest levels since 1928; Judge lifts stay in lawsuit against the state; and LSU lawyers scramble to reach settlement in public records case. 9.4 percent – Percent drop in general state sales-tax collections from July 2012 to July 2013. This is the tax that would have replaced the state income tax had Gov. Bobby Jindal’s tax-shift plan become law. (Source: Legislative Fiscal Office)

Sales tax collections down; income tax collections up
Earlier this year, Gov. Bobby Jindal proposed a new state tax structure that would have eliminated income taxes in favor of higher, broader sales taxes. In addition to pointing out that this proposal would raise taxes on the majority of Louisianans, critics also worried that an overreliance on sales taxes would destabilize the state’s finances and ultimately reduce overall revenues. New data from the Legislative Fiscal Office confirms those fears. According to the Focus on the Fisc, general sales tax collections dropped 9.4 percent from July 2012 to July 2013. The sales tax has failed to gain traction since fiscal year 2011, with a 1.1 percent drop in fiscal year 2012 and another drop possible for fiscal year 2013. In contrast, the personal income tax the governor wanted to get rid of climbed 5.9 percent from July 2012 to July 2013, and corporate income taxes increased by 21 percent over the same period.

Income inequality at greatest levels since 1928
The very wealthiest Americans earned more than 19 percent of the country’s household income last year — their biggest share since 1928, the year before the stock market crash — and the top 10 percent captured 48.2 percent of total earnings last year. As the Associated Press reports, a study by economists from the University of California, Berkeley, the Paris School of Economics and Oxford University found the gap between the rich and poor has grown for almost three decades and grew again last year as wealthy Americans cashed in stock holdings to avoid higher capital gains taxes that took effect in January. Meanwhile, workers’ earnings have become stagnant due to increasing competition with low-wage labor overseas and technology that is replacing workers in performing routine tasks.

Judge lifts stay in lawsuit against the state
District Judge Tim Kelley will allow a Maryland firm chosen to oversee Louisiana’s Medicaid claims to move forward with a civil suit against the state for wrongful termination of its contract. As Nola.com reports, CNSI filed a civil suit in May after its $200 million contract with the state was canceled amid allegations former state Health and Hospitals Secretary Bruce Greenstein improperly intervened on the firm’s behalf. Greenstein, who resigned a week after the suit was filed, was a former CNSI employee. Kelly originally halted the case after receiving documents from the state several days ago, but decided this week to lift the stay due to a procedural error by the state’s lawyers.

LSU lawyers scramble to reach settlement in public records case
Lawyers representing The Advocate, The Times-Picayune and the LSU Board of Supervisors will try to reach a settlement this week in a case brought against the university for failing to disclose the names of candidates who applied to serve as LSU’s president. LSU has repeatedly failed to comply with a court order to overturn the documents, leading District Judge Janice Clark to threaten board members with jail time and to order East Baton Rouge Parish Sheriff Sid Gautreaux to seize records associated with LSU’s presidential search. Neither of those efforts have lead to the disclosure of the public records. Following a closed-door meeting between all parties on Tuesday, lawyers announced that they will work the rest of the week to reach an agreement that would have LSU produce the records to the judge.

9.4 percent – Percent drop in general state sales-tax collections from July 2012 to July 2013. This is the tax that would have replaced the state income tax had Gov. Bobby Jindal’s tax-shift plan become law. (Source: Legislative Fiscal Office)