Edwards advisory team includes tax increases in its report

The menu of options Gov. John Bel Edwards will consider to bring the budget under control includes tax increases, according to a report released Friday by the governor’s transition committee on fiscal matters.

The advisory committee listed a number of ideas to help state government handle a $1.9 billion shortfall in revenues for this fiscal year and next while stabilizing the state’s financial structure for the future. The advisers stressed the ideas are just options from which budget architects can pick and choose.

Among the revenue-raising thoughts is returning to the higher tax brackets adopted in the Stelly Plan but rolled back by the Legislature in 2008.

Stelly was approved by voters but was unpopular with many. It lowered sales taxes on certain items but raised income taxes by expanding the tax brackets. Changing the brackets, which lowered income taxes, without raising the sales taxes again cost the state about $1 billion a year.

Richard Carbo, Edwards’ spokesman, said late Friday that the governor asked the committee to present him with a menu of options. “He’s continuing to review their recommendations before taking a plan to the Legislature and the citizens of Louisiana on how to address the state’s budget crisis,” Carbo said.

The committee also threw out the idea of lowering Louisiana’s overall income tax rates across the board and establishing flat corporate tax rates, if voters agree to eliminate the deduction that reduces the amount owed to the state by the amount paid in federal income taxes.

Another option is to require various services, currently exempt, to start paying sales taxes. Another is to increase the fuel tax, bringing it closer to the national average.

“It is no secret that Louisiana is facing daunting budget challenges right now. My team has been working very hard to identify innovative, common-sense solutions to those challenges,” Edwards said in a news release.

Edwards’ gubernatorial campaign focused on Louisiana’s problems with sustaining enough revenue to pay for services, a budget structure riddled with required spending and tax breaks the state can’t afford. Since his election in November, Edwards repeatedly has said all options are on the table, including taxes.

This report is the first with specifics coming from the Edwards’ camp on just what “shared sacrifice” might mean.

The committee’s report states that revenue measures should be considered only “after all cuts have been made that do not jeopardize public safety, economic security, health care and the orderly functioning of government.”

Budget architects should consider only revenue-raising measures that would modernize Louisiana’s tax structure by making it less complex and more efficient, the report states. And taxes should be spread among various groups.

The list of revenue raisers also includes a tax on processing oil and gas at refineries, which is an idea long pushed by the transition committee’s chairman, Public Service Commissioner Foster Campbell, of Bossier Parish.

The committee, which included lawyers, accountants and businesspeople, took testimony to develop the options.

“While the perspectives sometimes differed, there was consensus that Louisiana faces structural deficits that pose immediate and long-term threats to state government’s ability to provide basic services such as health care, education, transportation and public safety that citizens expect,” Campbell and Deputy Chairwoman Sharon B. Robinson said in a prepared statement.

More Stories