By William Patrick | The Center Square
Louisiana voters soon will have the opportunity to consider four constitutional ballot amendments in this year’s fall election. All four items are tax and budget issues that could become permanent by majority vote.
Business groups such as the Louisiana Association of Business and Industry are encouraging passage of Amendments 1 and 2, which would centralize sales and use taxes and decrease the individual income tax rate for top earners.
“Louisiana’s business tax climate ranks among the worst in the nation,” LABI President and CEO Stephen Waguespack said. “A pair of tax reform measures on the November 13th ballot could change that, enacting constitutional amendments to finally simplify our system, meaning lower tax rates and more jobs in Louisiana.”
The Louisiana Budget Project, a Baton Rouge-based nonprofit, opposes the tax reduction amendment, saying passage could harm the state budget and lead to “less money for education, health care and transportation.”
The election’s two other proposed amendments deal with levee districts and state budget funding.
The fall election was scheduled for Oct. 9, but Gov. John Bel Edwards postponed Election Day to Nov. 13 because of Hurricane Ida. Most of Louisiana will see only the four constitutional amendments on their ballot, though some parishes and cities also will conduct local elections.
Amendment 1: Streamlining sales and use taxes
The first ballot measure proposes amending the Louisiana Constitution to create the State and Local Streamlined Sales and Use Tax Commission, which would centralize the filing, remittance and collection of sales and uses taxes.
According to the Public Affairs Research Council of Louisiana, the Louisiana Department of Revenue collects a state sales and use tax of 4.45%, while local governments collect sales and use taxes averaging around 5%.
However, Louisiana’s 64 parishes have differing tax policies and policy interpretations that complicate sales and use tax collection and remittance, though current law also protects them from state government encroachment, a PARC report said.
“This highly decentralized system is unusual; nearly all other states allow a central collector who remits the revenue to the appropriate state and local jurisdictions and acts as the central authority for how and when taxes should be applied,” the report said.
Amendment 2: Individual income taxes
A “yes” vote on Amendment 2 would decrease the maximum individual income tax rate from 6% to 4.75% beginning next year. Passage also would remove the ability to deduct federal income taxes from an individual’s state income tax liability, which is currently allowed. A “no” vote would leave the tax rate and federal deduction in place.
The Council for A Better Louisiana, a nonpartisan public interest group, supports the proposal, which also would apply to corporations. CABL said in statement that reducing the top state income tax rate is “generally revenue neutral to the state and taxpayers.”
The Louisiana Budget Project disagrees, saying the amendment would amount to a “tax swap” that would benefit individuals and corporations that already have the highest incomes.
Amendment 3: Taxing authority for levee districts
Amendment 3 asks voters to consider a constitutional provision that would allow levee districts created after 2006 to raise taxes in districts where a majority of voters approve.
Passage would allow the levee districts to increase property taxes up to five mills, or $5 per $1,000 of assessed property value. The tax revenues would be used for “constructing and maintaining levees, levee drainage, flood protection and hurricane flood protection.”
Amendment 4: Funding budget deficits
The final ballot amendment applies to the state budget. Voters will be asked whether they support an increase to the amount of money currently allowed to cope with projected budget deficits.
The Louisiana Constitution and state law allows 5% of dedicated funding to be redirected to items other than what was originally intended. Amendment 4 would increase the limit to 10%.
The Public Affairs Research Council said dedicated funds can tie the hands of lawmakers, but also ensure legislatively approved programs and priorities. If the ballot proposal passes, current dedicated funding items would remain unchanged and joint legislative budget committees would have to approve any new changes.
All four proposed constitutional amendments were referred to the fall election ballot by the state Legislature, after the amendments each received a required two-thirds vote in the House and Senate. Amendments 1 and 2 stem from three separate tax reform bills – House Bill 278, House Bill 292 and Senate Bill 161.
According to the Louisiana secretary of state’s office, residents can register to vote in-person or by mail until Oct. 13. Online registration will continue until Oct. 23. Early voting begins Oct. 30 and runs through Nov. 6.