Senate advances costly tax swap package

Senate advances costly tax swap package

A tax swap package that advanced out of the Senate on Tuesday could cost the state more than $1 billion in revenue from corporate taxes over the next five years. Sen. Bret Allain’s Senate Bill 1 would reduce Louisiana’s corporate franchise tax in equal increments over a four-year period beginning in 2025. Allain’s companion bill, Senate Bill 6, was meant to offset the massive amount of revenue that will be lost from SB1 by scaling back the state’s costly and ineffective Quality Jobs Program. But as the Louisiana Illuminator’s Wesley Muller explains, an amendment tacked on to the bill watered it down before the upper chamber gave its approval. 

The Quality Jobs program, administered through Louisiana Economic Development (LED), offers payroll tax rebates to certain businesses for creating or retaining jobs. The incentive program costs the state millions every year, so the initial version of the bill could have offset as much as 40% of the revenue lost from repealing the franchise tax, according to the fiscal note. However, the Senate adopted an amendment for Senate Bill 6 on Tuesday to only shrink — rather than fully repeal — the Quality Jobs program. The latest version of the bill reduces Quality Jobs tax credits by 50% of their current value, thereby weakening the proposal’s potential to offset the loss of corporate franchise tax revenue.  The fiscal note further pointed out that Louisiana likely won’t see an offset for several years.

Allain said his bills won’t affect programs and priorities financed out of the state general fund, since corporate tax collections above $600 million flow into a new rainy-day fund created in 2019. 


Ballot initiatives in Louisiana?
Lawmakers will debate a bill by Rep. Mandie Landry on Wednesday that would allow voters to put issues directly onto ballots. But the effort to create a ballot initiative process in Louisiana started years ago, beginning with former-Gov. Mike Foster and continuing with former state legislators David Vitter, Jay Dardenne and Rick Gallot, among others. But as the Louisiana Illuminator’s Piper Hutchinson explains, each effort was thwarted by an unusual alliance between labor unions and corporate lobbyists who often clash on other issues. 

The proposal was last heard in 2019, when former Sen. Norby Chabert, R-Houma, brought the bill. Chabert came to the table ready to defer the bill, citing the history of the AFL-CIO’s and LABI’s joint resistance to the idea. The proposal was deferred after just seven minutes of discussion. … “This is fair and equal to everyone, no matter what the issue is,” Landry said, echoing Foster’s assertion in a 1999 interview with The Advocate.  “This is a people issue,” Foster said at the time.  Landry acknowledges the process could easily be used to advance conservative causes.  “I’ll just have to live with myself if that happens,” Landry said. 


‘Statewide’ juvenile records bill is head fake
Rep. Debbie Villio is describing her effort to make confidential juvenile court records open to public review – but only for three parishes – as a “statewide” initiative after receiving pushback from some her colleagues and criminal justice advocates. The pushback stems from the fact that Villio’s House Bill 321 would only apply to the state’s three largest parishes – East Baton Rouge, Orleans and Caddo – all of which are majority Black. The Times-Picayune | Baton Rouge Advocate’s Will Sutton, after trying to clarify the statewide assertion, urges lawmakers not to fall for Villiohead fake. 

 Villio pointed to language in the bill that says, “This Article (Ch. C. 412 Confidentiality of Records) shall not apply to Subparagraph (B) (1) of Article 879, in which those records shall be made available to the public…” “It is a shall and the public is statewide,” she added. So, Villio’s (and, I assume, Landry’s) idea of making the bill “statewide” means giving people everywhere access to the records. Truth is once you put something online as a public record it can be accessed from anywhere in the world. And the records that will be open to public review are not from all 64 parishes — just the three with large Black populations. 


No college, no problem
With a tight job market – and a growing realization that many jobs don’t require a college degree – governors around the country are opening state jobs to people without four-year diplomas. So far, eight state executives have taken these steps or similar ones, and the National Governors Association has recommended the other 42 follow suit. The Washington Post’s Olivier Knox and Caroline Anders report: 

“For too many job opportunities, a degree requirement represents a paper ceiling that overlooks qualified applicants who have gained skills through vocational training, community college, military service, and on-the-job experience,” they wrote. Degree requirements close off opportunities for 76 percent of Black adults, 83 percent of Latino adults and 75 percent of rural residents, Murphy and Cox said.


Number of the Day 
$3.5 trillion – Cost of extending tax cuts in the 2017 Tax Cuts and Jobs Act, many of which are scheduled to expire in 2025. House Republicans have made deficit reduction a key plank of their demands to raise the debt ceiling, but are simultaneously pushing for an extension of trillions of dollars in tax cuts. (Source: Congressional Budget Office)