La. lawmakers approve key legislation during final hours of the session; Cantrell feels blindsided by one measure

Federal COVID-19 relief dollars helped to ease the budgetary process
Updated: Jun. 10, 2021 at 7:13 PM CDT
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NEW ORLEANS (WVUE) - State lawmakers approved some weighty issues on the final day of the 2021 regular legislative session including giving final approval to the so-called “tax swap” legislation.

The legislation eliminates the personal income tax deduction and corporate tax deductions for federal income taxes paid. In exchange for that, state income tax rates would be lower.

Voters will have the final say on the legislation in the fall.

Sen. Bret Allain spoke on the legislation before the final vote to clear its passage.

“This is the constitutional amendment that it’s all tied to. If this passes the voters’ muster in October it will change the words ‘Shall Have a Federal Income Tax Deduction to a May.’ So, it’s still an option for us. It reduces the maximum allowable rate for individual income rate from 6% to 4.75%. That’s a ceiling,” Allain said.

But not everyone thinks changing the state constitution is the best way to achieve the change.

Sen. Karen Carter Peterson said the change should be accomplished statutorily.

“The concept is a good one, we want to reduce income taxes. The problem that I have with the bill is that it goes into the constitution, and I don’t believe that we should be putting this tax reform initiative in the constitution to have to go back to the people in order to change the rate of the income taxes,” said Peterson.

Dillard University political analyst Dr. Robert Collins agrees with Peterson.

“As a general, rational public policy decision it’s really not wise to put any tax policy into a constitution because it makes it too difficult to change,” said Collins.

Final approval was also granted to legislation setting rules for sports betting in the state.

“The state of Louisiana is competing directly with the state of Mississippi and their casinos have had sports gambling for years now and it’s too easy for a resident of Louisiana to drive 45 minutes and place a bet with a casino in Mississippi,” Collins said.

The final day of the session did not include last-minute budget wrangling. Billions in COVID-19 federal relief dollars put more money at state government’s disposal.

“So, all of that extra money is not only giving them a cushion but is giving them a lot of surplus money to do a lot of deferred maintenance and to do a lot of issues that were put on the back burner in past years.”

The governor said about the budget he signed into law for the new fiscal year which begins July 1, “Louisiana’s budget responsibly uses federal coronavirus recovery dollars in our ongoing response and long-term resurgence following the pandemic, without creating structural budget issues in the future.”

But Collins thinks the state will have to amend its spending in the coming years.

“Even though the governor said in his press release that they passed the budget this year without causing any future structural difficulties the simple reality is that they’re operating right now with money that simply is not going to be there in future sessions, so there are going to have to be some sort of structural revenue changes in the future in order to avoid future deficits,” said Collins.

The new budget gives $800 pay raises to K through 12 teachers and $400 to school support workers. Edwards says the raises “are not enough” and Kesler Camese-Jones, who is president of the Jefferson Federation of Teachers agrees.

“Well, we wanted more, too, obviously. For years, we really have wanted our state to be at, or even beyond the southern average and obviously, that target keeps moving as other states have given more money to their teachers and support staff,” said Camese-Jones.

She said what educators have been required to handle during the pandemic underscores that point.

“Our folks rose to the occasion, I mean this was unprecedented and whatever the task called for, they did it,” said Camese-Jones.

Earlier this week, legislators also sent to the governor a bill to make kindergarten mandatory in Louisiana.

“There are different opinions, but I, we all know as educators the earlier we can receive our students, the better,” Camese Jones stated.

Another constitutional amendment will go before Louisiana voters in the fall. It will begin the centralization of the state’s sales tax collections if voters approve the proposal.

But New Orleans Mayor Latoya Cantrell says she was blindsided by the measure and does not believe it will be good for city government.

“I don’t believe that is in the best interest of the city of New Orleans. The leadership at the state level initially promised me that, that would be going to the ballot in 20-22. I was blind-sided that it would be going to the ballot this fall and so with that I don’t believe that, that’s a good way to build partnerships,” said Cantrell.

The session ended at 6 pm.

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