Rep. Nelson’s tax shift

Rep. Nelson’s tax shift

State Rep. Richard Nelson, who is likely to run for governor in 2023, visited the Baton Rouge Press Club on Monday to tout his plan for scrapping Louisiana’s personal and corporate income tax. This is some of what we learned:
– He wants it to be “revenue neutral,” meaning the $5 billion a year Louisiana raises through income taxes would have to be made up by raising other taxes.
– Nelson is still working on the details, but his plan involves raising property taxes on individuals (by scaling back the homestead exemption) and manufacturing corporations (by eliminating the Industrial Tax Exemption Program) and raising the state sales tax.
– He would make up some of the shortfall by cutting state aid for public schools that goes to “wealthy” parishes. David Jacobs of the Baton Rouge Business Report was there: 

He envisions raising the state sales tax from 4.5% to 6% and broadening the sales tax base while capping the local rate at 3%. And he thinks the state could reduce education spending for wealthier parishes that can pay for their own schools, while reserving state Minimum Foundation Program dollars for poorer areas.  The House Ways and Means Committee is studying the issue before making recommendations to the full body. Nelson plans to propose a single instrument to amend the state constitution, which would need approval from at least two-thirds of lawmakers in each chamber and a majority of voters. 

Reality check: Louisiana’s income tax is very low by national standards, yet the revenue it raises provides critical support for our schools, hospitals and other vital services. Eliminating this tax would inevitably shift the responsibility for paying taxes from wealthy people and corporations to low-income Louisianans and small businesses, and make it much harder to balance the state budget each year. 

Black voter representation at SCOTUS
The U.S. Supreme Court is hearing oral arguments today on a case that will test the strength of the Voting Rights Act. In January, a three-judge federal panel struck down a congressional map approved by the Alabama legislature on the grounds that it discriminates against Black people by including just a single majority-minority district. The AP has a preview of a case that could have far-reaching effects:  

The February decision by the court is “a troubling sign of what may be to come,” said Michael Li, senior counsel in the Democracy Center for the Brennan Center for Justice at New York University. He said there is a real chance the Supreme Court could further gut the Voting Rights Act and “make it all but impossible to use.” “If the VRA doesn’t apply in the Black Belt of Alabama, it is hard to see it applying in many places,” Li said. The effects of a decision in favor of Alabama could be widespread, potentially allowing states to dismantle or alter districts that have elected Black, Latino and other minority candidates.

This decision could create momentum for creating a second majority-minority district in Louisiana, where 33% of the population is Black yet only one of the state’s six congressional districts is majority-minority.

DXC and the failure of tax incentives
Last month, the state of Louisiana ended its partnership with DXC Technology because the firm repeatedly failed to meet job creation and payroll benchmarks. The deal, which gave away taxpayer money in exchange for the promise of new jobs and economic development, is a common incentive package for a poor state like Louisiana that ranks low on key quality of life metrics. An Advocate editorial says it’s time for Louisiana – and the rest of the country – to re-evaluate the corporate bribery schemes that pass for economic development:  

Still, the fate of the DXC incentive agreement raises an important question at this juncture: What is the value of cash grants from government to favored new employers? The casual answer is that if you don’t give the incentives, the jobs won’t come. In fact, an incentive doesn’t usually make the deal, it’s just an add-on bit of extortion that has become common. Congress should outlaw the practice, because it makes no sense for taxpayers in California to bid against those in Louisiana for jobs. In cases like the economically unjustifiable movie incentives, Baton Rouge might bid against New Orleans or Lafayette for film locations. That makes even less sense. But in the absence of action on Capitol Hill, the pay-to-play version of economic development is the rule, not the exception.

Previewing Ian’s unequal recovery
It’s been less than a week since Hurricane Ian engulfed Florida’s west coast with catastrophic wind, rain and storm surge. But while the area is in the early stages of the cleanup, one thing was clear even before the first blue tarps went up on damaged roofs: The recovery will be hardest on those who were already struggling to make ends meet. The New York Times’ Frances Robles, Audra D. S. Burch, Richard Fausset and Michael Majchrowicz report

After the storm, many Floridians, limited by low or fixed incomes, face finding a decent place to live in a state that is mired in an affordable housing crunch. The state’s enduring popularity, inflation and soaring rental costs have made it one of the least affordable places to live in the nation. Already, an estimated 2.24 million households in Florida with incomes below $50,000 pay more than 30 percent of their income in rent or mortgage — more than a quarter of the total households, according to the University of Florida’s Shimberg Center for Housing Studies. In counties that were under evacuation orders, less than 20 percent of homes have coverage through the National Flood Insurance Program.

Number of the Day
$3.2 million – Amount of money English-based Dax will pay to the Louisiana Department of Environmental Quality to settle air pollution claims against two of its factories in Louisiana. The two settlements, each equalling $1.6 million, are the largest amount paid to DEQ over the last decade. (Source: The Advocate)