tag:blogger.com,1999:blog-381737242024-03-14T00:41:23.728-07:00Louisiana Tax BlogLouisiana's tax system is outdated and unfair-- and decisions made by state, local and federal policymakers could make things better (or worse). This blog chronicles the latest developments in Louisiana's tax fairness and adequacy debate.Unknownnoreply@blogger.comBlogger24125tag:blogger.com,1999:blog-38173724.post-3459869985882932522009-12-22T16:46:00.000-08:002009-12-22T18:43:28.993-08:00Downs Gives Sneak Preview of Road Funding NeedsNext month we'll be hearing a lot about exactly how big Louisiana's transportation funding shortfall is. But House Transportation Committee Vice-Chairman Hollis Downs (R) <a href="http://www.2theadvocate.com/news/79282757.html?showAll=y&c=y">gave a sneak preview yesterday</a>. <blockquote>Louisiana needs $750 million per year in new revenue to address road and bridge needs, the vice-chairman of the House Transportation Committee said Monday. </blockquote>To put this in context, Louisiana raises a bit less than this annually from its entire gasoline tax right now. So if the money were all coming from own-source gas tax revenues, Louisiana would have to more than double its gas tax to meet its needs.<br /><br />Of course, the state's transportation funding doesn't really work that way. The feds kick in a fair amount, and state vehicle fees, tolls and general fund revenue fill in the gaps. But the size of the annual gap still should give pause to any Louisiana lawmakers who think they've got a budget surplus.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-38173724.post-51143385398688088472009-12-09T06:15:00.000-08:002009-12-09T06:16:15.644-08:00Is It Possible for Property Taxes to Be Too Low?In Louisiana, the answer is probably "yes."<br />An <a href="http://www.2theadvocate.com/opinion/78615262.html?index=14&c=y">excellent editorial</a> in the <em>Daily Advocate</em> notes that the ten lowest-property-tax counties in America in 2006-2008 (for residential property) were all in Louisiana. The main reason for this is pretty straightforward: every owner-occupied home in Louisiana receives an exemption for the first $75,000 of home value. In practice, this amount covers something close to half of all properties in the state.<br />The topic is being raised right now because there are active proposals to increase the homestead exemption. As the <em>Advocate</em> editorial correctly notes, the impact of this would be a <blockquote>shift of tax burdens directly onto owners of business and commercial property. It also would shift more of the property tax burden onto renters, rather than homeowners; renters pay property taxes through their monthly checks to landlords, without benefit of a homestead exemption. </blockquote>This isn't an argument that Louisiana's homestead exemption actually needs to be reduced. But it certainly makes a good case that further increases ought to be the last thing on state policymakers' minds at this time.Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-38173724.post-49741212063673396012009-11-27T06:59:00.000-08:002009-11-30T07:16:09.884-08:00Ashworth in Times-Picayune: More Revenue NeededOn one level, it doesn't take a visionary to see that the Louisiana tax system should be fairer and more sustainable. But it's still swimming against the tide, in the current political climate, to state these views. So, kudos to LANO's Edward Ashworth, who has an <a href="http://www.nola.com/opinions/index.ssf/2009/11/louisiana_deficit_demands_new.html">excellent column in today's Times-Picayune</a> making the case for progressive revenue-raising reform. An excerpt: <blockquote>It's a cliche that problems are opportunities, but Louisiana's financial situation presents a historic chance to realign the state's revenue-raising system so everyone -- individuals and corporations alike -- pays their fair share and the state has the money it needs. </blockquote>Ashworth correctly identifies the state's high reliance on sales taxes, and its low reliance on income taxes, as driving factors in making the state's tax system more unfair than most other states' revenue-raising structures.<br /><br />As long as you don't read the reader comments, you will leave this op-ed a smarter person than before you read it.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-38173724.post-36534960237446235622009-11-05T09:49:00.000-08:002009-11-30T07:17:05.174-08:00Louisiana's Tax Amnesty: $303M in the bankThe count is in: the recently-ended Louisiana tax amnesty <a href="http://www.2theadvocate.com/news/politics/69257487.html">brought in $303 million</a> in revenue for the state.<br />The lion's share of the money-- $277 million-- was paid by delinquent businesses, with individuals ponying up the remaining $26 million.<br />This result raises three interesting policy questions.<br />1) <strong>Was the amnesty, taken on its own, a good deal for the state?</strong> Amnesties are often driven by the need to get revenue immediately at any cost, and all too often the result is that states agree to give up all penalties and interest if delinquent taxpayers just pay the original balance. The problem with this, of course, is that the delinquent taxpayers are essentially getting an interest-free loan, and the state is not getting what they're legally due. In this particular case, the deal apparently was that if you settled up in full, you got to keep half of the interest that was due. This is less costly than what a lot of states have done. It still does, however, carry a cost to the state. Verdict: Could have been worse.<br />2) <strong>What to do with the money?</strong> More than half is going to shore up specific funds: the rainy day fund and a "coastal fund." The rest, more controversially, is going to pay for health care. If this is controversial, it's because it's using what is arguably a one-shot revenue inflow to pay for what is clearly an ongoing expenditure. Put another way, finding a dollar bill under the cushions of your couch can help buy you dinner tonight, but then it won't help you tomorrow night. Gov. Jindal is arguing explicitly that at least some of this revenue should be thought of as ongoing, because they're bringing taxpayers back into the system. But the official verdict will come from the Revenue Estimating Conference. Verdict: thumbs up for shoring up rainy day fund, but don't pat yourself on the back for solving the health care funding problem just yet.<br />3) <strong>What are the implications for successful enforcement of the tax laws?</strong> A main argument against amnesties is that if folks know they're coming, they'll be less afraid to avoid taxes in the first place. This will be a problem if Louisiana continues to do amnesties, but is not clearly so yet. The really interesting question is what you can infer from the huge different between the amount raised from businesses ($277M) and the amount paid by individuals ($26M). Does this mean that businesses are cheating more? Alternative plausible explanations: businesses pay proportionally more of Louisiana taxes to begin with than do individuals (although this really can't explain the huge difference), or that the individuals who owe the most aren't taking advantage of the amnesty simply because they can't afford to, even with half the interest given back.<br /><br />The $303 million yield of this amnesty will certainly help the fiscal situation in the short run. But Louisiana policymakers should take this opportunity to think strategically about what this success means for future amnesties-- and, more importantly, what it tells them about where they need to focus their normal enforcement efforts.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-38173724.post-80646248238166301292008-05-15T20:34:00.000-07:002008-06-11T20:50:08.939-07:00No Income Tax Repeal-- For NowSo this is what passes for sane tax policy among Louisiana lawmakers: elected officials have agreed that before digging a $4 billion hole in the state budget by repealing the state's income tax, they need to think about it a little bit first.<div><br /></div><div>The <span class="Apple-style-span" style="font-style: italic;">Shreveport Times</span>' editorial board <a href="http://www.shreveporttimes.com/apps/pbcs.dll/article?AID=/20080514/OPINION03/805140317/1025/SPORTS0101">notes with approval</a> that lawmakers have decided they need to take a longer look before they leap on this one. But that's not because the fine folks at the Times think income tax repeal is a dumb idea per se: <blockquote>[T]he elimination of the state's income tax, if done quickly, could be a potent tool to reverse population outmigration in a state poised to lose a congressional district after the 2010 census.</blockquote> No, they're just a bit worried about what income tax repeal might to do other taxes.</div><div><br /></div><div>The Times' caution on the income-tax-repeal idea is warranted-- but they have the wrong reason for worrying. The real problem lawmakers need to think about is that we just don't know what the economic impact of income tax repeal would be. Taken on its own, repeal would put more money in Louisianans' pockets, which would obviously be good for the economy-- taken on its own. But if income tax repeal turns out to be unaffordable-- say, because the oil-price boom generating Louisiana's current budget surplus turns out not to be sustainable-- then this tax cut will have to be paid for with spending cuts. Whether that's done through reducing employment, abandoning transportation infrastructure upgrades or paring back health care spending, these spending cuts will-- taken on their own-- have exactly the opposite economic impact of the tax cuts. </div><div><br /></div><div>Which effect wins out? Does cutting taxes help the economy more than cutting spending hurts it? Hard to say- it depends what sort of spending cuts result. But the point to remember is that the Times doesn't want to recognize that this choice is a two-sided coin. You can't evaluate the impact of tax cuts without at least trying to evaluate the impact of spending cuts.</div>Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-38173724.post-90964504253974317242007-06-12T01:05:00.000-07:002007-06-12T01:14:25.444-07:00Landrieu: Extend Targeted Tax CutsEven as a brewing scandal unfolds surround the state's tax incentive program for on-location film-making, Louisiana Lieutenant Governor Mitch Landrieu <a href="http://www.2theadvocate.com/news/7949717.html">says he wants to extend this approach to economic development into new areas</a>: <blockquote>Louisiana should take a cue from its successful film tax credit program and<br />target other areas that could boost the state’s cultural economy, Lt. Gov. Mitch<br />Landrieu said Monday.<br />The film tax credit program is an example of “a targeted tax policy” that is working to improve the cultural and economic climate in Louisiana, Landrieu told the Press Club of Baton Rouge. The film industry success is why Landrieu said his agency is pushing tax credits in other areas, such as, for artists, individuals in the food industry and historic preservation. </blockquote>Targeted tax incentives can go wrong in two important ways. First, when competing jurisdictions start offering the same incentives, your own tax incentives suddenly lose their effectiveness. (And you can make a case that this is exactly what's happened with Louisiana's film incentives.) Second, each tiny little incentive erodes the state's tax base a tiny little bit. The more tax incentives you offer, the more the base erodes. And each bit of base erosion effectively shifts the cost of funding public services onto everyone else-- that is, except for the artists and filmmakers and "individuals in the food industry." In short, tax incentives are a zero-sum game, and the more you work to create winners, the more you are inevitably creating losers.<br /><br />If Landrieu has his way, and Louisiana's film incentives turn out to be the vanguard of more comprehensive effort to provide tax breaks for everyone with an artistic bone in their bodies, the less-artistic among us will suddenly find that our Louisiana taxes are higher than they used to be-- and they'll have Landrieu's tax incentives to thank.Unknownnoreply@blogger.com3tag:blogger.com,1999:blog-38173724.post-68295788909348881422007-06-09T11:56:00.000-07:002007-06-09T12:09:52.665-07:00Times-Picayune: Stop Playing Santa With Local Government RevenueAs Louisiana lawmakers consider a number of different approaches to a temporary "sales tax holiday," the editorial board at the Times-Picayune <a href="http://www.nola.com/news/t-p/editorials/index.ssf?/base/news-4/1181370281128160.xml&coll=1">has some sound advice</a> for legislative tax writers: don't force local governments to foot the bill.<br /><br />The board notes that the most prominent proposal, authored by Rep. Billy Montgomery, "would waive not only state <a name="ORIGHIT_3"></a><a name="HIT_3"></a>taxes but also <a name="ORIGHIT_4"></a><a name="HIT_4"></a>taxes collected by local governments for services ranging from schools to law enforcement." They continue:<br /><blockquote>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.<br />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.<br />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.</blockquote>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 <a href="http://www.itepnet.org/pb17hol.pdf">ITEP policy brief</a>.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-38173724.post-70875789620551281912007-05-30T15:36:00.001-07:002007-05-30T15:36:53.755-07:00Bribing Louisiana Couples to Stay Married?Louisiana lawmakers face the pleasant prospect of a <a href="http://blog.nola.com/times-picayune/2007/05/panel_increases_budget_forecas.html">big budget surplus</a>-- at least in the short run. As a result, this year's legislative session has been primarily about how (and how much) to cut taxes. There's been a parade of clever, and not-so-clever, ideas.<br /><br />Yesterday's session of the state House tax writing committee was no different. Representative Gary Beard (R-Baton Rouge) proposed what he calls a "marriage-strengthening tax deduction" bill, <a href="http://www.legis.state.la.us/billdata/streamdocument.asp?did=423616">HB 279</a>. The bill gives a tax deduction of $100 for each year of marriage starting with the fifth year, with a cap of $2,000 on the deduction for each return.<br /><br />The implications are fascinating.<br /><ul><li>The first five years of marriage apparently are trouble-free enough that no tax incentives are needed to keep the marriage together. </li><li>But at the five-year mark, marriages start going to hell pretty fast. The longer you stay married past this point, the bigger your tax deduction.</li><li>And it's only on their silver anniversaries that Louisianans find themselves able to keep their marriages together without a little extra encouragement from the tax system each year.</li><li>Since the marriage tax break is designed as a credit rather than a deduction, the sponsor clearly thinks that rich people need more incentive to stay married than do poorer families.</li><li>Since the tax break is a nonrefundable deduction, the clear implication is that families too poor to pay state income taxes have more stable marriages than do wealthier families.</li></ul><p>Ways and Means Committee members had few questions before they politely put the bill on the "bone pile" of tax proposals that may (or may not) someday be voted on in committee.</p><p>But Rep. Rick Farrar had a good one, asking whether there would be a "clawback" provision: in other words, if you get divorced, do you have to give the money back?</p><p>At a time when Louisiana lawmakers are discussing some big-ticket tax cuts, the Farrar bill is small potatoes-- hardly worth discussing except to laugh at it. But it's actually a pretty good allegory for the economic development tax incentives state lawmakers offer every day. Earlier this month, Alabama lawmakers gave the ThyssenKrupp corporation $800 million in immediate tax incentives-- and the promise of a thirty-year exemption from state corporate income taxes--to encourage them to build a steel mill in Alabama. Did the incentives change ThyssenKrupp's mind-- or just reward them for what they were going to do anyway? No one really knows except ThyssenKrupp. Similarly, no one know if a $100 tax deduction is going to be enough to keep a bad marriage going for one more year. The most likely outcome is that a bunch of happy couples will get a tax break for doing something they were going to do anyway-- stay married. </p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-38173724.post-55652175391986659692007-05-28T14:29:00.000-07:002007-05-28T14:38:20.068-07:00A Permanent Transportation Funding Solution for Louisiana?<a href="http://www.2theadvocate.com/news/politics/7705557.html">The Advocate reports</a> that Louisiana lawmakers are moving towards an agreement that would provide a permanent, ongoing source of funding for additional transportation spending, rather than a one-shot injection of surplus revenues. The main source of this ongoing revenue: the state's sales tax revenue from car and truck sales. This year, the yield from this part of the sales tax base is pegged at $382 million.<br /><br />So what's smart about this idea? Its main virtue is that it's matching a growing spending area (transportation) with a growing funding source-- the sales tax. Sales taxes are based on the value of the thing sold, so as prices go up with inflation, the sales tax paid on cars will go up too. By contrast, the gasoline taxes that states most typically use to fund roads are (usually) levied on a per-cent basis, which means that they don't grow so fast. A 20-cent tax on a gallon of gas will bring in the same amount, in nominal terms, five years from now as it does today.<br /><br />Of course, the flip side is that if this bill passes, revenue that is currently designated for general-fund spending won't be there anymore. So this bill is robbing from Peter to pay Paul. To the extent that Louisiana lawmakers are still wondering whether their budget surpluses are "sustainable" in that they'll still be around 3 or 5 years from now, this "moving things around" approach to funding transportation leaves something to be desired.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-38173724.post-20990801198412580622007-05-28T13:40:00.000-07:002007-05-28T14:01:19.768-07:00How not to talk about the budgetary processMichelle Milhollon <a href="http://www.2theadvocate.com/news/7712042.html">reports in today's Advertiser</a> that the spending priorities of state lawmakers could make it harder to pass the up-to-$500 million in tax breaks that Republican leaders are pushing for. And where is the money going? Milhollon leads with a, well, leading example: <blockquote>A historic social club, city planning efforts, a balloon festival and an animal disease lab are among the Baton Rouge area projects stuffed into the $29.6 billion state budget proposal.</blockquote>Buried beneath this obviously anti-government language, there is an important story here: the battle between advocates of adequately-funded public services and, well, opponents of adequately-funded public services. Louisiana's budget surplus is going either for spending hikes, or tax cuts, or both-- and there ought to be a healthy debate over this. To her credit, Milhollon ultimately gets to an explanation of what the contested spending priorities are: <blockquote><p>The added spending runs the gamut:<br />An additional $71 million to move 3,000 disabled people — including 150 with Lou Gehrig’s disease — off waiting lists for community-based health care services.<br />$1.8 million to ensure that state troopers are the highest-paid law enforcement in the state.<br />More than $42 million for charity hospitals, including funding for additional detoxification and psychiatric beds.<br />$40 million for public schools’ basic operations. The governor already planned to spend $430 million on pay raises for teachers, corrections officers, state workers and others.</p></blockquote>This is, of course, fundamentally uninteresting stuff to most people. But does that make it OK for Milhollon to lead her article with the image of a "balloon festival" being "stuffed into" the budget? I laugh all the time at consultants who are constantly talking about "framing" ideological topics to shape the debate in your direction. But that really isn't the job of journalists-- and her opening paragraph plays right into people's latent fears of an ineffective, pork-laden government. The real thing I want to know from this article is, where's the $410 million of new spending that Milhollon says got added to the budget last week go? What's it buying? And my hunch is that the "balloon festival" is the tiniest slice of this money.<br /><br />We all love to make fun of inefficiencies, and they're more obviously on display in the public (government) sphere than in the private, corporate sphere. But that doesn't mean the media should be beating this drum.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-38173724.post-19671653410069012602007-05-25T06:21:00.000-07:002007-05-25T06:25:42.500-07:00Who Benefits from SB66?In the wake of the Louisiana Senate's passage of SB66, which gradually re-introduces itemized deductions to Louisiana's state income tax, John Hill <a href="http://www.shreveporttimes.com/apps/pbcs.dll/article?AID=/20070525/NEWS01/705250334/1002/NEWS">has a concise and accurate explanation</a> of who would benefit from this plan:About 350,000 to 400,000 — or about 20 percent of Louisiana tax filers — would be eligible for the tax break that would be phased in over three years, according to the Legislative Fiscal Office. The first year, the tax cuts would total $157 million, growing to $308 million when the restoration is fully implemented. The other 80 percent of Louisiana tax filers would get no tax cuts under the plan.<br /><br />Which makes bill sponsor Robert Adley's claim about the fairness of his plan seem pretty laughable: <blockquote>Adley responded that he and other legislators had received a lot of calls complaining about the Stelly Plan's income tax changes. "This is not a bill for all those high-income people. This is a bill for the middle class."</blockquote>Or at least for 20 percent of them.Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-38173724.post-7735958605505516402007-05-25T05:49:00.000-07:002007-05-25T06:01:59.474-07:00Undoing the Stelly Plan: A "Middle-Class Tax Cut?"The Louisiana Senate has approved a bill that would undo part of the "Stelly" income tax reforms of 2002. The bill would gradually re-introduce a provision allowing Louisianans who itemize their federal income taxes to claim some itemized deductions on their state tax forms.<br /><br />Marsha Shuler <a href="http://www.2theadvocate.com/news/7680217.html?showAll=y&c=y">covers the story in today's Advocate</a>. Regarding the question of how many Louisianans would benefit from this tax change, she makes the point a bit subtly: <blockquote>SB66 would phase in itemized personal deductions at 57.5 percent beginning this year — at a $157 million state cost — and it would reach 100 percent in 2009-2010. About one-fourth of Louisiana’s income tax filers itemize.</blockquote>The omitted point-- that 75% of Louisianans would get nothing at all from this plan--may be obvious to some, but not to many.<br /><br />And the omission becomes more glaring later on in the story, when Senator James Cain makes a very different assertion about who would benefit from this plan: <blockquote>Cain noted that a group of teachers were in the Senate chamber opposing the move. “That’s what hurts me the most,” Cain said. He said many in their number are being hurt by the Stelly income tax. “It hurts the middle class,” he said. </blockquote>The disjunction between what Cain says and what the data tell us is there if you want to look for it, but it would have been nice to see Shuler connect the dots a bit more. <br /><br />An equally interesting argument from Cain is that Louisiana should re-introduce itemized deductions simply because most other states allow them. <blockquote>“Only seven states in America do what we do. We are the only state in the South doing it,” Cain said.</blockquote>The fact of the matter is that plenty of tax policy types think federal itemized deductions (at least some of them) are just bad tax policy, providing expensive and poorly targeted subsidies for homeownership, charitable giving and other "good" behaviors. The President's tax reform commission (remember them) recommended modifying or repealing most of them a while back. And you can make a pretty good case that the states that have gotten rid of these deductions (like Louisiana) or that never had them (like, say, Illinois) are the ones that have the right idea.<br /><br />No one like to stick out, and one hears this argument being used to sway state lawmakers all the time. But being different doesn't always have to be bad.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-38173724.post-22605591645647620322007-05-23T05:21:00.000-07:002007-05-23T05:28:08.166-07:00Latest Revenue Estimates Show Even More "Surplus" RevenueThe <a href="http://www.2theadvocate.com/news/politics/7640176.html">news Louisiana lawmakers have been waiting for is in</a>.<br />The state's Revenue Estimating Committee released new estimates last night of the projected budget surplus for the ongoing fiscal year, and for the year beginning in July. The answers:<br /><ul><li>An additional $118 million for the current year.</li><li>An additional $128 million for next year. </li></ul>This tells us nothing, of course, about whether this "extra" revenue can truly be considered a surplus. It's only obviously a surplus in the sense that it's money coming in that the state wasn't expecting at this time yesterday.<br /><br />Now comes the interesting part: lawmakers get to decide whether they'd rather devote the newfound surplus to meeting unmet infrastructure needs-- from education to transportation to health care-- or whether they'd prefer to enact a bunch of tax cuts. Let the fireworks begin!Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-38173724.post-71611826094212529762007-05-14T05:58:00.000-07:002007-05-14T07:09:15.347-07:00Paved With Good Intentions: Louisiana Lawmakers Consider Tax Breaks for Theater ProductionsAs we <a href="http://louisianataxblog.blogspot.com/2007/03/tax-breaks-for-filmmaking-not-enough.html">noted back in March</a>, Louisiana's tax credit for film-making activities has come under scrutiny in some quarters this year. A tax proposal that made intuitive sense to some when Louisiana was one of the few states doing it-- giving tax breaks to movie-makers to encourage them to film in Louisiana rather than in other states--now seems less obviously good when dozens of other states are providing essentially the same tax giveaways.<br /><br />But now, as the Associated Press' <a href="http://www.nola.com/newsflash/louisiana/index.ssf?/base/news-32/1179086092127330.xml&storylist=louisiana">Melinda Deslatte documents</a>, the Louisiana legislature is considering taking the next step: offering tax breaks to musical and theater productions. Rep. Jeff Arnold, a Democrat from New Orleans, has introduced <a href="http://www.legis.state.la.us/billdata/streamdocument.asp?did=420657">HB 155</a>, which would provide refundable tax credits for "musical or theatrical productions" that employ Louisiana workers.<br /><br />There are lots of sensible questions to ask about such a credit. Start with two: What kind of productions should benefit? And how we do know the incentives will actually change these production's behavior rather than rewarding them for something they would have done anyway?<br /><br />"Musical or theatrical productions" covers a pretty broad swath of the cultural spectrum. The bill's language says this term "shall include but not be limited to drama, comedy, comedy revue, opera, ballet, jazz, cabaret, and variety entertainment."<br /><br />Does this mean that when Jerry Seinfeld brings his comedy show to Shreveport, he'll get a tax credit for doing so? That the Rolling Stones will be subsidized to appear before college students in Baton Rouge? That famed tax-avoiders U2 will get yet another tax bonus if they rock New Orleans? Apparently they will, as long as Louisiana marks the first stop on their US tour.<br /><br />And what happens when neighboring states do exactly the same thing? In testimony before the Ways and Means Committee, bill booster Roger Wilson, the chairman of something called "Broadway South, LLC" argues unconvincingly that "no other state... is offering a similar incentive" and that no other state has the infrastructure in place to meaningfully offer similar incentives"-- and admits in the same breath that Louisiana has virtually no musical/theater industry to begin with. He doesn't make much of a case for why Texas or Mississippi can't productively enact exactly the same credit next year.<br /><br />Wilson also compares the intended impact of the theater tax break to the alleged impact of the existing film tax break in a way that makes the motives of this giveaway seem pretty craven:<br /><blockquote>Any movie that’s made in Louisiana as a result of the initiatives you passed years ago is basically stolen from other cities... We want to propose an initiative that will do the same thing[for musical and theater productions.] </blockquote>This is what economic development experts like the folks at <a href="http://www.goodjobsfirst.org/">Good Jobs First</a> are talking about when they decry the "race to the bottom." When states or cities use tax incentives to simply steal investment from other states and cities, the net impact on the US economy is, at best, zero. The same investments are taking place-- just in a different place than they used to be. And if the tax breaks in question are encouraging companies to invest in an area that simply wouldn't make sense economically otherwise, the net impact on the US economy is arguably negative. Theater companies would be moving from a place that makes sense economically to a place that doesn't.<br /><br />It's not popular to argue that the leeway given state and local lawmakers to provide tax incentives should be curtailed in the name of a more effective national economic policy. We all value state and local autonomy very highly. But listening to this sort of blatant job piracy gives one a lot of sympathy for imposing such limits.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-38173724.post-84745316599268693462007-05-13T12:24:00.000-07:002007-05-13T12:42:21.218-07:00Shreveport Times: Keep Stelly Plan?Tax topic #1 for Louisiana lawmakers so far this year has been whether or not to repeal the "Stelly tax plan," which cut sales taxes and hiked income taxes back in 2002. Today the editorial board at the Shreveport Times <a href="http://www.shreveporttimes.com/apps/pbcs.dll/article?AID=/20070513/OPINION03/705120330/1058/OPINION03">says it exactly right</a>: <blockquote>A massive overhaul of that favorite whipping boy, the Stelly Plan, is a step backward. It properly shifted the state away from a dependence on regressive sales taxes on food and utilities, "temporary" taxes that made Wall Street bond analysts nervous, and shifted the burden to a less regressive income tax.</blockquote>But the Times also understands why lawmakers are nervous about defending the Stelly plan: <blockquote>But couple that with a tax bracket shift and the loss in the ability to make deductions in home mortgage payments and medical expenses and many- middle and-upper income taxpayers soon began crying foul.</blockquote>Paying for the Stelly sales tax cuts with a hike in another tax was the responsible thing to do-- and hiking the income tax in a way that eliminated special tax breaks made the tax system fairer in a number of ways. The burden should be on advocates of Stelly-plan repeal to explain why bringing back these long-dead tax breaks is actually good policy.<br /><br />In parting, the Times suggests if Stelly repeal is in the cards, lawmakers should follow their M.O. from years past, when they've made tax hikes temporary, by making any income tax cuts temporary and contingent on economic growth: <blockquote>Just as lawmakers were content for years to rely on a system of temporary sales taxes to prop up the state budget, perhaps those dead set on tax breaks would consider putting sunset provisions on tax changes as a hedge against the bottom falling out of state revenues.</blockquote>This also seems right on: nothing is certain in Louisiana revenue forecasting. The state's dependence on oil revenues means that the difference between revenue boom and revenue boost can be a small one. Lawmakers should be mindful of this as they decide the fate of the Stelly reforms.Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-38173724.post-62217447789018043772007-05-12T15:19:00.000-07:002007-05-30T08:18:19.458-07:00Why ThyssenKrupp picked AlabamaIt's official: <a href="http://staugustine.com/stories/051307/business_4591941.shtml">Louisiana won't be getting the new ThyssenKrupp manufacturing facility</a>. The company announced yesterday that it will build its plant in Alabama-- the one remaining state against which Louisiana was competing for this economic development prize.<br /><br />So what did it cost Alabama? Let's start with what we know:<br /><ul><li><strong>$461.1 million</strong> in direct financial aid, including land acquisition, site preparation, worker training, and road improvements.</li><li><strong>$350.3 million</strong> in "abatements of sales, property and utility taxes by state and local governments."</li></ul><p>Which adds up to a cool $811 million in direct spending and tax breaks up front. Now for the part we can't put a price tag on:In addition, the company won't have to pay any state income tax for the next 30 years unless its tax liability exceeds $185 million in any year. And since the entire state corporate income tax only brought in $484 million in fiscal year 2006, it's hard to imagine how Thyssen's new plant could possibly rack up $185 million on its own. So that "unless" statement is pretty meaningless: Thyssen is getting a free pass for 30 years on the corporate income tax.</p><p>So you can't put a price tag on that part of the deal, but that doesn't mean it's free. </p><p>So if Louisianans are looking for consolation in the wake of "losing" this smokestack-chasing contest, try this on: maybe this is a race they couldn't have afforded to win. And maybe Alabama will find they can't afford it either.</p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-38173724.post-17152239514824302872007-05-11T12:44:00.000-07:002007-05-13T13:01:27.250-07:00The Advocate: Keep the Stelly PlanIn the wake of <a href="http://www.ctj.org/blog/2007/05/louisiana-survey-fix-roads-first.html">new poll results</a> showing that Louisianans don't view new tax cuts as a big priority, many are wondering why elected officials are going against their constituents' preferences by pushing for tax cuts. Today the editorial board at the Baton Rouge Advocate <a href="http://www.2theadvocate.com/opinion/7454186.html">goes one step further</a>. If you're going to cut taxes, they ask, why would you repeal the progressive 2002 income-tax-for-sales-tax swap known as the "Stelly plan" in particular? After questioning "the political wisdom of railing against a tax policy change that left the vast majority of taxpayers better off," the Advocate comes up with a theory: <blockquote>Part of it is human nature: People benefit a little bit every day from the sales taxes eliminated in 2002 by passage of the Stelly plan. But everybody notices when they write a larger check for state income tax. Lawmakers are responding to aggrieved, mostly affluent constituents who pay big income tax bills.</blockquote>This is a commonly cited problem with the sales tax: even the low-income folks who are hit hardest by it often don't notice, because they pay a nickel here and a nickel there rather than one big lump sum. If people don't notice the sales tax when they pay it, it's easy to understand that they wouldn't notice when (as a result of the Stelly sales tax cuts) they're not longer paying it. And income taxpayers who are accustomed to writing off their itemized deductions on state income tax returns will very likely notice when (also as a result of the Stelly reforms) they're no longer able to.<br /><br />But "the squeaky wheel gets the grease" isn't much of a principle for tax policy. The Advocate suggests that if lawmakers do find they can afford tax cuts, they should tailor these cuts in ways that could actually affect the economy: <blockquote>If tax cuts are called for, why should they not be targeted on economic development issues? By that, we mean reducing or cutting the business taxes levied in Louisiana but not in competing Southern states, or that otherwise impede business development. </blockquote>There's a bigger debate to be had here, of course: if economic development is the goal, one can legitimately ask whether tax cuts of any kind are the right way to go at a time when the state has wide-ranging unmet needs. But the Advocate is right to question state lawmakers' reflexive interest in repealing the Stelly tax cuts.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-38173724.post-44381732938456055072007-05-08T14:05:00.000-07:002007-05-08T14:33:22.752-07:00New LSU Poll: Voters Don't Want Tax CutsThe Public Policy Research Lab at LSU has released its <a href="http://www.survey.lsu.edu/downloads/2007springsurveyreport_FINAL.pdf">spring 2007 public policy survey</a>, just in time to inform the growing debate over how (if at all) Louisiana lawmakers should change the progressive "Stelly" income tax reforms enacted by voters back in 2002.<br /><br />The results, summarized by the <a href="http://www.shreveporttimes.com/apps/pbcs.dll/article?AID=/20070508/NEWS01/705080333/1002/NEWS">Shreveport Times here</a>, suggest that tax-cut-happy lawmakers are misinterpreting voter preferences in a couple of important ways:<br /><br />1) It turns out voters aren't all that interested in tax cuts. They'd rather see adequately funded public services.<br />2) For those who do want tax cuts, income taxes don't seem to be the thing they're most worried about.<br /><br />Here's the skinny on the spending-hike-versus-tax-cut point:<br /><ul><li>Among survey respondents who want to see any budget surpluses used for one-time expenses, road repair was the top choice (89 percent favor or strongly favor this option), following by paying off pension debt (75 percent) and hurricane recovery projects (71 percent). A one-time tax rebate came in a distant fourth place (57 percent).</li><li>Among those who want to see surpluses used to pay for recurring spending needs, the two big favorites were health care for the insured (84 percent favor or strongly favor) and increasing teacher pay (82 percent). Permanent tax cuts were a distant third, with 59 percent approval.</li></ul><p>Equally interesting is that for respondents who are mad about their taxes, the income tax appears to be the least of their worries. 50 percent of survey respondents now think that Louisiana sales taxes are too high. A smaller 40 percent of respondents think property taxes are too high, and just 33 percent of survey respondents thought income taxes were too high. </p><p>[As this <a href="http://www.ctj.org/louisiana/labalance.ppt">chart from Fair Tax Louisiana</a> shows, the survey respondents got it just about right: the only types of tax in Louisiana that are emphatically above average are sales and excise taxes. Income and property taxes just aren't that high.]</p><p>The conclusion to be drawn, according to LSU survey director Kirby Goidel:"[P]eople are less anti-tax than is commonly believed," Goidel said. "Most people realize this is a relatively low-tax state. What they want is value in what their money is spent for."</p>Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-38173724.post-70583493400504975672007-05-06T16:13:00.000-07:002007-05-08T16:22:47.706-07:00A Lawmaker's Guide to Targeted Tax BreaksAlert observers of the just-beginning Louisiana legislative season probably noticed when a <a href="http://www.shreveporttimes.com/apps/pbcs.dll/article?AID=/20070501/BREAKINGNEWS/70501011/1002/NEWS">House committee approved</a> what is universally described as a "tax cut for General Motors" last week.<br /><br />So how do you enact a tax cut for just one company? Here's the clever way: call it a tax break for "machinery and equipment used by a motor vehicle manufacturer with a North American Industry Classification System (NAICS) Code beginning with 3361." That's what the bill, <a href="http://www.legis.state.la.us/billdata/streamdocument.asp?did=429193">House Bill 633</a>, says.<br /><br />This isn't to say that there's anything sneaky or underhanded about the bill's language, or even that the proposal is a bad one. There's open agreement among lawmakers that the proposed tax break, which weighs in at a cost of $1.2 million, is designed specifically to benefit the General Motors plant in Shreveport. No one's concealing this. And exempting manufacturing inputs from the sales tax is the right thing to do: sales taxes are supposed to fall on retail sales, not the costs incurred by manufacturers. But it's interesting to see how effortlessly lawmakers can channel tax breaks exactly where they want to without actually naming the beneficiary.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-38173724.post-48625028096648469852007-03-26T15:43:00.000-07:002007-03-26T15:57:19.725-07:00Tax Breaks For Filmmaking: Not EnoughLouisiana was one of the first states to enact tax breaks as an incentive for filmmakers to shoot on location in the state. But as the Baton Rouge Advocate's editorial board <a href="http://www.2theadvocate.com/opinion/6629852.html">points out</a>, they're now just one of dozens of states offering such incentives--and this is illustrating just how limited the real economic impact of tax incentives proves to be.<br /><br />In particular, according to the Advocate, filmmakers are saying that the real problem with locating in Louisiana is not tax considerations-- it's the difficulty of finding trained film-making professionals to hire. Solving this problem is harder than just shelling out tax breaks, says the Advocate: <blockquote>The development and training of personnel is something the state can encourage through community colleges and state universities, but it is tough work — harder and a longer-term commitment than simply giving tax credits to Hollywood studios.</blockquote>It's often impossible to know whether a given business tax incentive is actually affecting companies' behavior, or whether they're just taking money for something they would have done anyway. But one thing we can be clear on is that these tax breaks aren't creating a smarter, better-trained workforce. In fact, to the extent that tax breaks deplete education funding, they're making it harder to build the educated workforce that ultimately could make Louisiana a more attractive location for businesses. And as the Advocate reminds us, any company that would be actually swayed by corporate tax incentives probably doesn't have much of a business plan to begin with: <blockquote>To be called “economic development,” a business can’t be based on tax breaks. It has to have solid underlying fundamentals. </blockquote>Amen to that.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-38173724.post-1168029782633998672007-01-05T11:32:00.000-08:002007-01-05T12:43:02.663-08:00Why a Well-Administered Property Tax MattersLouisiana is notorious for the poor quality of its property tax administration. Tax assessors are elected, and have a reputation for under-assessing properties. As a result, the "assessed value" of a Louisiana home (that is, the value of a home for property tax purposes) often has little to do with the home's market value. The Times-Picayune's Stephanie Grace <a href="http://www.nola.com/search/index.ssf?/base/news-0/116728991044300.xml?NOESG&coll=1">tells it like it is</a>: <blockquote>The property rolls have been corrupted by sloppy practices and laziness, and in some cases outright bad faith, by elected assessors who have long courted favor with voters by systematically lowballing, rather than fairly and accurately evaluate property values.</blockquote>This is all bad from a fairness perspective-- property taxes should be based on your home's actual value, not based on how much you bribe your assessor--but has been par for the course in Louisiana for a long time (as, in fairness, it was for a long time in most other states). But now this venality is coming back to bite Louisiana homeowners. In the wake of Hurricane Katrina, Louisiana policymakers have implemented a program called "<a href="http://www.road2la.org/">Road Home</a>," which is designed (among other things) to reimburse Louisiana homeowners whose homes were at least partially uninsured. Problem is, to reimburse for losses in home value you actually have to know how much a home was worth. And the complete disjunction between assessed value and market value in many areas of Louisiana means that when the state needs to actually know how much a home is really worth, the property tax system simply can't tell you.<br /><br />Despite this limitation, the Road Home program is an important rebuilding tool available to Louisianans hit hardest by the hurricanes. Find out more at <a href="http://www.road2la.org/">http://www.road2la.org/</a>.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-38173724.post-1166803488183050972006-12-22T07:58:00.000-08:002006-12-22T09:22:40.546-08:00Adventures in Property Tax DeformIn at least one Louisiana parish, some folks are pushing to change the way property taxes are administered by putting a cap on the amount by which a home's taxable value can grow from one year to the next.<br /><br />As the <a href="http://www.nola.com/search/index.ssf?/base/news-3/1166685595146230.xml?NERP&coll=1">Times Picayune explains</a>, this idea is being championed by the assessors themselves in St. John the Baptist Parish. <blockquote>Whitney Joseph Jr., the St. John assessor who is leading the effort to amend property tax rules, has not determined the exact limit he wants for the annual property tax increases. But he admires the 2 percent cap that California passed in 1978 with Proposition 13... "Hurricane Katrina not only devastated people's lives as far as destroying their properties, but it also increased the market value on things," Joseph said. "Everything went up. Insurance is going up on homes because of Katrina and now we are going to have to double or triple your taxes. Something has to be done."</blockquote>But market value is supposed to be the basis for measuring a homeowner's ability to pay taxes. What's so wrong with that? Here's Joseph's take on this: <blockquote>"This is not normal growth, people were coming in and desperate to buy homes," Joseph said. "They lived cramped in homes with their family and in hotel rooms, and when they received the insurance money they wanted to buy homes. They came in and started buying. I don't think they cared about how much they cost."</blockquote>The "let's cap assessed value" approach is wrong in general because it makes property taxes more unfair, as we've <a href="http://www.ctj.org/blog/2006/09/florida-save-our-homes-tax-shift.html">discussed elsewhere</a>. The first step in making property taxes fair should be ensuring that they're based on what a home is actually worth-- and assessed value caps basically abandon this fairness goal. Caps basically say that the (typically poorer) people who live in undesirable neighborhoods should have to pay a higher property tax rate than otherwise identical people who live in popular neighborhoods. (This is because poor people will be paying tax on 100% of their home's value, while wealthier people will be paying on less than 100% of their value due to the assessed value cap.)<br /><br />But there's a new twist here. Whitney is basically arguing that the yardstick Louisiana is using for measuring a homeowner's ability to pay taxes-- market value-- is simply a flawed measure in Louisiana right now. He's arguing (implicitly, at least) that post-hurricane real estate speculation has created a temporary bubble in real estate values that shouldn't be reflected in the property taxes people pay. A house that sold for $50,000 six months before Katrina is selling for twice that in Katrina's wake, and that (he argues) is a bubble that won't last.<br /><br />At the heart of Whitney's criticism is a basic truth about the property tax: for a lot of homeowners, a lot of the time, the "market value" of a home is pretty irrelevant to your short-term well-being. In the property tax world, a booming real estate tax market can make you "rich" pretty fast by jacking up your home's value, but if you have no plans to sell anytime soon, this doesn't make you "rich" in a way you can appreciate at all. The only real impact is that your property taxes go up.<br /><br />In the long run, of course, the use of market value as a yardstick is defensible because when you sell your house, you will absolutely enjoy the benefits of your home's growing value-- unless it turns out to be a temporary bubble. And Whitney is basically saying that's exactly what is going on with Louisiana.<br /><br />We've argued in the past that assessed value caps are just a bad idea because they create a gap between a home's assessed value and its actual worth. But if there's ever a time when these caps are appropriate, it's probably when a home's "actual worth" is being temporarily inflated due to a real estate bubble. At first glance, it's a compelling argument.<br /><br />And yet. For every home that has rapidly appreciated due to the recent wave of speculation, there's another home in a lousy neighborhood that isn't appreciating. And property tax caps, even in Whitney's "bubble" scenario, inevitably result in a tax shift away from the rapidly appreciating home toward the lousy-neighborhood home. That sort of tax shift is unfair in a way that assessed value caps can never justify: seeking to fix one perceived source of tax unfairness by making taxes even more unfair in a different way.<br /><br />There's a lot more to discuss here. From a practical perspective, there's the whole question of, if you're gonna have a tax cap, what that cap should be. The 2% cap implicitly suggested by Whitney's comments about California would be dangerously low, for reasons we'll discuss another day. But for the moment, the thing to remember is that Whitney's attempt at making the property tax less unfair would create a whole new kind of unfairness-- and one that would make affected homeowners just as mad as the current bubble is doing.Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-38173724.post-1166494436497321742006-12-18T17:36:00.000-08:002006-12-18T19:36:55.126-08:00Business Giveaways-- or Smart Tax Policy?"Economic development" was one of the main topics Louisiana Governor Kathleen Blanco wanted to put on the state legislature's agenda when she called the just-ended December special legislative session. But throughout the session, the media focused its attention primarily on Blanco's proposal to set aside $300 million in incentives to attract a new steel mill to the state.<br /><br />This is too bad, because there were a couple of other state tax reforms on the agenda that made a lot of sense-- with a couple of caveats.<br /><br /><a href="http://www.legis.state.la.us/billdata/byinst.asp?sessionid=062ES&billid=HB67">House Bill 67</a> was, on its face, a sales tax cut for business. In particular, the bill would have accelerated the implementation of a sales tax cut that was <a href="http://www.legis.state.la.us/bills/byinst.asp?sessionid=041ES&billtype=HB&billno=2">enacted in 2004</a>. The 2004 tax cut (House Bill 2 of the 2004 special legislative session) gradually eliminated the state sales tax on the machinery that manufacturers buy for use in, well, manufacturing things.<br /><br />There's a pretty straightforward reason why manufacturers shouldn't pay sales tax on machinery used in the manufacturing process. The sales tax is supposed to apply only to retail sales-- purchases of finished product for personal consumption by the purchaser, like furniture, a book or a DVD. When the tax applies to sales of products that aren't being purchased for purposes of consumption-- like the lathing equipment that a furniture manufacturer uses to make a chair-- the manufacturer pays the sales tax initially. But when it sells the chair to a wholesaler, it passes the sales tax on to the wholesaler in the form of a higher sales price. The wholesaler passes that higher price on to retailers, who in turn charge consumers more for the chairs they buy. And the final consumer-- a Louisiana resident who buys a chair-- is effectively paying sales tax twice (once for the actual retail sales tax on his purchase, and once for the manufacturer's sales tax that is embedded in the sales price).<br /><br />It could get worse. Suppose the Louisiana sales tax applied to furniture wholesalers too. Then the Louisiana resident would end up paying sales tax three times when he buys a chair.<br /><br />This process-- where a sales tax levied on different stages of production gets passed through to final consumers-- is called pyramiding. Pyramiding affects different industries (and different retail products) differently, in unpredictable and unfair ways. The more stages of production in a good are taxed, the more pyramiding there is, and the higher the sales tax on the final consumer.<br /><br />So when the state legislature moved in 2004 to gradually exempt the manufacturing machinery bought by manufacturers, they were taking a good step toward eliminating pyramiding, and making the sales tax more rational and fair.<br /><br />They were also taking a very expensive step, which is why the 2004 legislation phased in this exemption very gradually-- between 2005 and 2010. So when it became clear this fall that the state was facing budget surpluses (at least in the short run), lawmakers sensibly decided to try and accelerate the phasein. As the special session dissolved into partisan chaos, the sales tax bill fell by the wayside (as did almost all of Blanco's goals for the session).<br /><br />And that's mostly too bad. But here are two caveats:<br />1) Using surpluses to fund tax cuts only makes sense when you've got a long-term, recurring surplus. Paying for a permanent tax cut with temporary money is a recipe for fiscal disaster--and no one in state government is saying that the state is permanently awash in funds. So there are real questions about whether the accelerated cuts would have been affordable.<br />2) Accelerating the tax cut for all manufacturers is a fine thing, if it's affordable. But one bill that was floated during the special session would have basically accelerated the tax cut for one company: General Motors. <a href="http://www.legis.state.la.us/billdata/byinst.asp?sessionid=062ES&billid=SB15">House Bill 15</a> would have immediately exempted "certain machinery and equipment of motor vehicle manufacturers with an NAICS Code beginning with 3361." The official fiscal note for HB 15 <a href="http://www.legis.state.la.us/billdata/streamdocument.asp?did=414134">notes</a> that "Proponents of the bill have indicated that it is intended to provide a full tax reduction to the General Motors facility in Shreveport."<br /><br />This is the wrong way to tackle this problem. GM shouldn't get special treatment simply because it's got more effective lobbyists than other Louisiana industries affected by the sales tax. Carving out special preferences for particular companies heightens the perception that legislation, and tax legislation in particular, is being bought and paid for by moneyed interests. This perception (which is unfortunately correct all too often) undermines public support for adequate and fair taxation.<br /><br />There's a lot of unfairness in the Louisiana tax system, and eliminating pyramiding in the sales tax base is only part of the answer. But let's hope that when lawmakers return this spring to deal with important questions of tax fairness and adequacy, they attack the pyramiding problem in an even-handed and affordable way.Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-38173724.post-1166460531373321522006-12-18T06:57:00.000-08:002006-12-18T15:15:52.456-08:00Special Session Goes Down in FlamesThe December special session of Louisiana's state legislature, called by Governor Kathleen Blanco earlier this month, <a href="http://www.leesvilledailyleader.com/articles/2006/12/15/news/news2.txt">ended on Friday</a> with little to show for it. Blanco was hoping for a variety of new tax breaks, added spending, and a package of economic incentives to help attract a steel mill to the state. All she got for her troubles was the steel-mill incentives. Tax cuts <a href="http://www.shreveporttimes.com/apps/pbcs.dll/article?AID=/20061216/NEWS01/612160333">were part of the debate</a> right up until the end: lawmakers debated cuts that would have been most valuable to low-income families as well as tax cuts reserved for upper-income Louisianans. An ITEP analysis of these tax cuts can be found <a href="http://www.itepnet.org/la121406pr.pdf">here</a>.<br /><br />This story has a lot of interesting facets that are worth exploring: whether the steel-mill incentives have been well designed, and whether the tax cuts being considered were well-designed, to start with. But one interesting development is the allegation, by some observers, that the whole thing was sabotaged in the name of political gamesmanship-- and in a way that was unusually partisan by Louisiana standards.<br /><br />Folks inside and outside of the legislature <a href="http://www.nola.com/newsflash/louisiana/index.ssf?/base/news-29/1166389750188460.xml&storylist=louisiana">are calling</a> the prematurely-ended session a sign that there's now a level of partisanship among lawmakers that didn't exist previously. The <a href="http://www.nola.com/news/t-p/frontpage/index.ssf?/base/news-7/1166342283303770.xml&coll=1">Times-Picayune reports</a> the dismay of one lawmaker at the fact that, during a critical point in the session, the two party caucuses met separately to discuss their legislative strategies:<br /><blockquote>Rep. Troy Hebert, D-Jeanerette, said he could not recall another time when the caucuses broke off from the chamber to discuss legislative strategy.<br />"That's the saddest day I have seen in this chamber for the 11 years that I have been here," Hebert said as the House was debating for the second time Tuesday whether to raise the cap.<br />"When Hunt Downer was speaker, there was not an aisle in<br />this House," Hebert said, referring to Blanco's chief liaison to the Legislature, a Republican who was speaker under Gov. Mike Foster.</blockquote>From a national perspective, this hardly seems like the end of the world, of course: there's a huge continuum between simply recognizing that parties exist (which I think is what an "aisle" does quite well!) and creating the sort of scorched-earth atmosphere that has pervaded Washington DC for the last decade. But there's no question that Louisiana faces some pretty hefty fiscal policy decisions in the near future: if these decisions are, in fact, being clouded by partisan judgments, that would be a shame.Unknownnoreply@blogger.com0