Saturday, June 09, 2007

Times-Picayune: Stop Playing Santa With Local Government Revenue

As Louisiana lawmakers consider a number of different approaches to a temporary "sales tax holiday," the editorial board at the Times-Picayune has some sound advice for legislative tax writers: don't force local governments to foot the bill.

The board notes that the most prominent proposal, authored by Rep. Billy Montgomery, "would waive not only state taxes but also taxes collected by local governments for services ranging from schools to law enforcement." They continue:
Rep. Montgomery's proposal... would take away millions of dollars from municipalities and parishes across the state -- a decision that should be up to the governing bodies of those localities, not to the Legislature.
If this bill becomes law, the state would be dealing a particularly hard blow to local governments recovering from the 2005 hurricanes, which need every bit of revenue to rebuild infrastructure and provide services. This is why the city of New Orleans is opposing Rep. Montgomery's measure.
But even better-off localities would suffer. The Legislature would be taking away local revenues at the same time that proposed pay raises to public employees in Gov. Blanco's budget are poised to increase the operating costs of many local governments.
States enacting sales tax holidays usually don't force locals to follow suit-- and even then, there's virtual unanimity among tax policy analysts that they're bad tax policy, offering lawmakers a weekend's worth of good PR without offering meaningful tax cuts to the fixed-income families who are hit hardest by the sales tax. But Louisiana's "screw the locals" approach adds a whole new dimension to one of the most cynical tax "relief" ploys that has been dreamed up by tax-averse, PR-hungry lawmakers in recent years. Find out more about sales tax holidays in this ITEP policy brief.

1 comment:

jessica said...

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