The “temporary” 1-cent increase in Louisiana’s state sales tax, approved by lawmakers in 2016, was supposed to serve as a bridge to structural tax reforms. But those reforms never came, as House leaders rejected the recommendations of its own task force and other reform advocates. As a result, the special legislative session that starts next week will focus on whether to renew part of the sales tax, and whether the renewal should be permanent. The Advocate editorial board is not impressed.
The governor is precisely right: The sales tax hike more heavily hits the poor. It is also a business tax, as it is a “sales and use” tax that is paid on materials and other inputs for products. As the governor has also pointed out, the sales tax in Louisiana in general is in disarray, with different “pennies” applying to different purchases, and many services taxed in other states not touched by Louisiana’s system. For all the accuracy of the governor’s analysis, there’s an important political angle: We urge lawmakers to talk to old-timers about what happened in the 1990s, when state government was also reliant on “temporary” sales taxes that had to be renewed every two years.
Trump’s budget would hurt the poor
A 25-year-old Baltimore mom, formerly homeless, trying to care for three young children. A 60-year-old grandmother in Connecticut who’s been unable to work since 2010 due to chronic illness. They are two of the 90 million Americans whose lives could be disrupted by cuts to the federal safety net proposed by President Donald Trump in his 2019 budget. It would be especially devastating for the 5.7 million Americans who rely on three targeted programs programs – housing assistance, Medicaid and Supplemental Nutrition Assistance Program (SNAP). The Washington Post’s Caitlin Dewey and Tracy Jan explain:.
“Is that making America great — by making it unbearable for people who are U.S. citizens to even live here?” asked Daisy Franklin, a 60-year-old grandmother in Norwalk, Conn., whose household of four relies upon Medicaid, a federal housing voucher and more than $300 a month in food stamps. “It sounds like Trump is trying to turn the clock back.” … Franklin’s family is representative of the average household on public benefits, government statistics show. The majority of Americans on welfare programs for the poor are children, seniors, people with disabilities and working adults with low-paying jobs. According to the National Low Income Housing Coalition, only 6 percent of housing subsidy recipients are able to work but do not. Among SNAP recipients, that figure is 14 percent, according to a 2014 release from the Department of Agriculture.
Who is Together Baton Rouge?
Together Baton Rouge has come a long way since its first victory in 2011 – repairing a broken bridge in the Glen Oaks Area. Since then, it has become a prominent voice in the capital area, with many suggesting that its rise has caused big businesses to face credible opposition for the first time in decades. TBR has since moved on to more high-profile, controversial issues, such as a dedicated property tax to fund the failing Capital Area Transit System, the Industrial Tax Exemption Program and the breakaway movement by St. George. With more attention comes more scrutiny, but many in Baton Rouge still don’t know who the group is and what is stands for. Stephanie Riegel with the Baton Rouge Business Report gives an inside look at the organization.
Not since Victor Bussie’s AFO-CIO of the 1970s and 1980s has business and industry in Louisiana had to deal with such an organized opposition. Though TBR’s activism springs from different roots and impulses than did the union’s, it speaks for those who don’t feel as though they have a voice against the powers that be, and it has demonstrated that it, too, has the ability to become a powerful force. … “It’s not very often that a nonprofit organization can really affect long lasting change and that is what Together Baton Rouge has done with the ITEP,” says Louisiana Budget Project Director Jan Moller, whose group is a member of Together Louisiana. “It’s the proverbial David and Goliath story, and David won.”
Job numbers don’t live up to tax breaks
Corporate tax breaks are anathema for some and a panacea for others. As Louisiana faces a more than $1 billion fiscal cliff as temporary taxes expire, people are looking at ways of generating more revenue, and doing away with “corporate welfare” is a hotly debated item. The Advocate’s Timothy Boone looks at tragic fate of Gameloft, a video game developer, which never fully lived up to its end of the bargain of creating more jobs in exchange for tax breaks.
To bring Gameloft to the Crescent City, the state offered some $3.7 million in performance-based grants. LED said this included $2 million — payable in 10 annual installments of $200,000 — to offset leasing or financing costs for the studio, along with $1.5 million to cover the costs of establishing the studio and $200,000 to defray relocation costs borne by the company in establishing its New Orleans operations…Gameloft also took advantage of Louisiana’s digital media tax credit program, which provides credits for 25 percent of the base in-state investment, and another 10 percent if those production costs include Louisiana payroll.
Number of the Day
$2 trillion – Projected annual federal deficit in 2027 as a result of President Donald Trump’s 2019 executive budget. (Source: The New York Times via Committee for a Responsible Federal Budget)