BATON ROUGE, La. (AP) — Hundreds of millions of dollars Louisiana doles out in tax breaks each year are squarely in lawmakers' crosshairs as they consider rewriting the state's tax laws.
New Orleans Sen. J.P. Morrell, chairman of the Senate Revenue and Fiscal Affairs Committee, spent dozens of hours last year holding hearings that examined every tax break on the books. Now he's trying to get rid of some of them, saying Louisiana might have been able to afford them once, but not anymore.
"There are many programs the state has created over the last 30 years that have no return (on investment) and we simply can't afford anymore. Now, all of these programs essentially become these weird types of entitlement programs," said Morrell, a Democrat. "There are credits that exist on the books, exemptions that exist on the books that logically don't make sense."
Gov. John Bel Edwards also is taking aim, proposing some for removal and others for reduced generosity.
Lawmakers will consider the ideas in the regular legislative session that begins April 10.
Louisiana will spend an estimated $6.8 billion on tax breaks in the current budget year and collect about $7.2 billion in taxes, despite budget woes that have forced steep cuts in government spending areas, according to revenue department data.
In 2015, lawmakers capped Louisiana's film tax credit program and made temporary, across-the-board reductions to a long list of tax break programs. In 2016, they put new limits on other tax credits on the list.
This year, the Democratic governor is proposing getting rid of a tax break that allows people and businesses to deduct the federal income taxes they pay from their state tax liability, in exchange for lowering overall income tax rates.
Edwards and lawmakers also are proposing to eliminate smaller tax breaks for such things as old airplane purchases, bone marrow donor expenses, vehicle conversions to alternative fuel, donations to public schools and playgrounds, musical and theatrical productions and more.
It's unclear how much the proposals could save Louisiana.
Sen. Jay Luneau, D-Alexandria, wants to get rid of the entire film and TV production tax credit program. Morrell wants to keep it.
Edwards wants to make permanent across-the-board cuts of 20 to 28 percent to some tax breaks before those cuts expire next year. Continuing the reductions would bring in more than $192 million a year, the governor estimates.
As an example of a worthless tax break, Morrell points to a sales tax exemption for purchases of antique aircraft built at least 25 years ago and not used in commerce. He said no one bothered to defend it when his tax-writing committee held hearings last year, but since he's filed a bill to eliminate it, he's heard opposition.
"I'm getting pushback on everything," Morrell said. "No one's like, 'Please cut my tax credit.' Some of the people that didn't show up to defend, now they have lobbyists."
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Posted on Tue, April 4, 2017
by MELINDA DESLATTE Associated Press