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Gov. Edwards Unveils Reforms to Stabilize Louisiana's Budget

For Release On:

March 29, 2017

BATON ROUGE: Today, Gov. John Bel Edwards unveiled his plan to stabilize Louisiana’s budget and eliminate the frequency of mid-year budget cuts. Gov. Edwards’ plan incorporates best practices from states around the country and calls for reforms to the state’s tax and budget practices to allow for more stability and predictability for businesses, while also leveling the playing field and cutting taxes for 90 percent of Louisiana personal income tax filers. The plan also includes recommendations from the bipartisan tax reform task force created by the legislature last year. Under Gov. Edwards’ proposal, critical programs, such as TOPS, as well as an increase for K-12 education, would be funded for the fiscal year that begins on July 1.

Gov. Edwards’ plan includes:

  • The elimination of one penny of the state sales tax;
  • The elimination of the deduction for federal income tax on corporations and individuals;
  • A tax cut for more than 90 percent of personal income tax filers and lower corporate tax rates;
  • A phase out of the Corporate Franchise Tax over 10 years;
  • Cleaning the existing sales tax and applying it to more goods and services;
  • Implementing a Commercial Activity Tax (CAT) for entities doing business in Louisiana, while exempting small businesses; and
  • The elimination of tax expenditures that are no longer used by the state or are no longer an efficient use of taxpayer funds.

“The current tax and budgeting practices simply aren’t working for Louisiana and don’t provide a level playing field for both individuals and businesses,” said Gov. Edwards. “The bipartisan task force gave us the blueprint for how to stabilize our state. Now, it’s up to us to find the courage to make the bold reforms that will allow us to invest in education, health care and other priorities that are important to the people of Louisiana. This isn’t about raising taxes. It’s about modernizing a broken system in Louisiana, and I am hopeful that members of the legislature will come into this Regular Session with an open mind and willingness to work together to get the job done for the people we represent.”

The CAT for Louisiana was modeled off of best practices from states around the country, but tailored to suit the needs of Louisiana. It recognizes that states have different tax structures and rely on different revenue sources that may not be assessed in the state of Louisiana.

According to the Louisiana Department of Revenue, in 2015, there were 149,000 corporate tax filers in the state. Data shows that more than 129,000 of those filers paid no taxes to the state of Louisiana. Gov. Edwards’ plan would create a fair tax system to ensure that we all pay our fair share. In addition, the CAT proposed by Gov. Edwards would exempt small businesses making less than $1.5 million per year. Of the 414,000 businesses in the state, 389,000 make less than $1.5 million annually. These businesses would be assessed a flat $250 tax, rather than the calculation for gross receipts.

Click here for the complete proposal from Gov. Edwards, including a summary of how the proposed CAT would be applied in Louisiana.


 
Original Press Release http://gov.louisiana.gov& #x2f;news/gov-edwards-unveils-refor ms-to-stabilize-louisianas-budget

Republished by LOUISIANA NEWS | www.louisiana.gov