Governor eyes income tax hikes to cover more than half of the budget shortfall.
48 Revenue-Raising Items to be Discussed in Special Session
The fiscal year begins on July 1, and at this
writing, Louisiana is still $600 million short of having enough money to pay
its bills. Sorting this out is the focus of the special session that began 30
minutes after the close of the regular legislative session on June 6.
This comes just months after the special session
that concluded in March, in which the Legislature passed temporary sales tax
hikes to raise $1.2 billion in revenue to address a projected $2 billion budget
shortfall. Even still, a budget gap remained, meaning spending cuts to K-12,
higher education, the TOPS college scholarship program, hospitals for the poor
and uninsured, child protective services, and prisons unless more revenue was
raised.
Gov. John Bel Edwards is advocating for passing
more tax increases and eliminating some tax breaks in order to come up with the
$600 million. Among the 48 items Gov. Edwards would like to address during
special session:
- Expanding the top two income tax
brackets - Cutting in half the amount of
deductions people can take on their state income taxes based on their
federal tax deductions - Imposing a new tax on insurance
companies - Fixing some of the “messy” sales
tax hikes implemented just months ago
NOLA.com reports that if the top two income tax brackets were expanded, it
could raise about $324 million for the state—more than half of the budget gap.
For small business owners who pay their business taxes at the personal rate as
pass-through entities, this would be a devastating blow.
Many lawmakers have expressed resistance to the
governor’s proposals, saying it’s too soon to raise taxes or eliminate tax
credits after just approving tax hikes a few months ago and pushing for a pause
in raising revenue until the fall, when the state will have a better idea of
what’s needed.
With a week remaining in the special session,
let your legislators know how sales tax increases are affecting you and how
personal income tax hikes would be a significant hit to small business owners!
