Louisiana legislators have tried during a number of recent annual sessions to eliminate without success much of the over $7 billion in revenue that the state loses every year in tax breaks, exemptions and credits. They are planning to try again during Republican Gov. Jeff Landry’s current special session on tax reform.

Among the 33 House and Senate bills being debated there are some that are aimed at reducing income, corporation franchise and inventory taxes. Others will either renew or create new taxes to replace the revenues that would be lost by tax cuts.

The Advocate in its report on the session asked the key question: “Can Landry hold the line against the groups lobbying legislators to knock the revenue-raising measures they dislike out of his plan?”

As the newspaper said, governors have the power to kill or support projects in legislators’ areas and can appoint their friends and donors to sought-after state boards. The late-Govs. Buddy Roemer and Edwin W. Edwards got legislators to approve their tax plans, but voters rejected them in 1989 and 1992.

The late-Gov. Mike Foster’s support of the Stelly tax reform plan of 2002 helped get it approved by voters, but legislators killed the plan six years later.

Fiscal experts have said by imposing new sales taxes on services, renewing an existing 0.45% sales tax increase and a 2% tax on business utilities and ending some tax breaks would  raise nearly $1.4 billion to replace revenues being lost by creating flat individual and corporate income taxes.

The eventual goal is to eliminate both income taxes, which will take a few years. Good government groups are supporting what Gov. Landry is trying to do and it may give the state much better economic ratings, but it’s still going to be tough.

Landry said his plan would move Louisiana from 40^th to eighth in the State Business Tax Climate rankings of the Tax Foundation of Washington, D.C.

Richard Nelson, secretary of the state Department of Revenue and Landry’s tax czar, said the plan would improve the business climate, generate more jobs that would lead to more revenue to combat crime, educate school children and fix roads.

An editorial in Tuesday’s American Press talked about the plan to start taxing 42 services that aren’t currently subject to state and local sales taxes. Getting rid of tax breaks is the other major revenue producer to make up for income tax losses.

House Bill 10 by state Rep. Mark Wright, R-Covington, will try to get rid of some of those tax breaks. It is an extremely complex 140-page tax bill that combines some tax breaks and eliminates others. It is awaiting its first action in the House Ways and Means Committee.

Former state Rep. Stuart Bishop, R-Lafayette, was the last chairman of Ways and Means who tried to eliminate tax breaks. However, he spent much of his last session killing bills calling for more tax breaks.

Bishop’s bill eliminating tax breaks was 108 pages long and listed 230 tax breaks that totaled $7 billion.

“The bottom line is they are costing us,” Bishop said of the tax breaks. “… We have the most archaic and broken (tax) system. And we all know it.”

That is still true, but Bishop gave up his long-shot effort and told his House colleagues they would pass his bill but see it killed by the Senate.

Here is the problem:

The Advocate reported Monday that Tommy Faucheux, a lobbyist for major oil producers, and Brian Landry, a lobbyist for the petrochemical industry, both took pains to praise Landry for offering his tax plan. Then they told committee members that ending a tax break for businesses that store goods in Free Trade Zones would stifle investment.

Landry’s plan would also end tax breaks for movie production in Louisiana and restoration of historic buildings. However, lobbyists for the film tax credit, historic building tax credits and the Louisiana Association of Business and Industry said the tax breaks that benefit their members produce investment and jobs.

Rep. Julie Emerson, R-Carencro, and the Ways and Means chair, countered that saying, “Lowering (income tax) rates would benefit these companies more than the incentives would.”

We may find out which side is winning this argument when Wright’s bill is heard in Emerson’s committee.

Jim Beam, the retired editor of the American Press, has covered people and politics for more than six decades. Contact him at 337-515-8871 or jim.beam.press@gmail.com.

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