Governor Landry announces tax reform

BATON ROUGE, La. (WAFB) – Governor Landry announced a wave of new tax reform proposals at the Capital on Tuesday, October 1. Some of them will be debated during the Legislature’s likely special session next month, and others will require voter approval.

Landry cited $2 billion in budget cuts under his administration and spoke of the need for significant reform to avoid a billion-dollar deficit over the next four years.

“It’s like trying to fix a flat tire when you’re driving down the road,” Landry said. “You have to stop, put on a new tire and keep driving on the road. Sometimes you have to put on that little spare tire. At present, our car has three spare parts.

The gist of the governor’s proposal was a three percent flat income tax for people in the state’s two highest income brackets and no income tax for everyone else. Additionally, the proposal called for reducing the corporate tax rate from 7.5% to 3.5%. Landry says they will make up for this lost revenue by increasing sales taxes on services; from dog washing to lobbying to landscaping.

Landry is betting the cuts will make Louisiana a contender for the nation’s highest tax break to spur new investment and population growth. Susan Bourgeois, secretary of the Department of Economic Development, said most people agree the tax code needs to be changed.

“A bad tax code is the number one reason to take us off the list. So I like to say the governor is committed to giving us the tools in our toolbox,” Bourgeois said. “It completely changes the scope and size of our toolbox.”

Critics of the idea, like Jan Moller, executive director of Invest in Louisiana, wonder what would happen if new investment doesn’t come.

“It’s not just about the budget we have today, but also what the state is going to spend tomorrow,” Moller said. “We have to pay for this thing one way or another and so my concern is if we go ahead and cut taxes now it will make it much more difficult to fund services which I think are the basis of a strong economy.

Landry says he hopes to avoid cuts to education and health care, but wants to be more efficient in government spending. He says he views the state’s population decline as an existential problem. Critics agree that the problem is real, but differ on how to achieve a solution.

“The other side of the coin is that if we can invest enough money to create good schools, high-quality, affordable higher education, job training, safer communities, good roads and infrastructure, it will make Louisiana a more attractive place to come and start businesses; expand existing businesses,” Moller said.

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