The Senate Revenue and Fiscal Affairs committee has been reviewing dozens of tax credits, exemptions and rebates at its meetings during the ongoing regular session, but any legislation to change them may have to wait until the 2017 session or a possible second special session this year, whichever come first. Revenue and Fiscal Affairs Chair J.P. Morrell, D-New Orleans, said the committee is evaluating how effective each law has been.
For credits, that means finding the rate of return on investment and comparing the cost to the state in lost tax revenue to the value it brings to the economy.
For exemptions and rebates, it means checking the money the law was intended to save against its current performance.
Morrell cited the utility sales tax exemption as an example of how outside circumstances can change a credit’s effectiveness.
“When [the credit] was passed, the price of crude oil was very high and it was intended to give relief to the energy industry,” Morrell said. “Now, oil is very low and it has become lagniappe; it has become free money.”
Aside from only rolling back tax credits to raise state revenue, Morrell said the meetings would give the committee an opportunity to seek out ways to fix broken credits, or, where they have been effective, expand them.
The Louisiana Department of Revenue and other agencies are providing the committee with data about how often credits are claimed and how much they’re costing the state.
LDR released the 2015-16 Tax Exemption Budget earlier this month, listing the content and cost to the state of about 400 credits.
That adds up to about $8.2 billion in lost revenue annually for the state, but the list of credits is not exhaustive.
Just finding all the credits, rebates and exemptions peppered throughout the laws has been enough of a struggle, Morrell said.
“Some of these are so archaic and obscure we’re still finding new ones,” Morrell said.
With over 400 already laid out, the committee split them up by subject matter, and Morrell said they will hear testimony on at least 10 per meeting, but up to 30 to 40 on some days.
In related news, a task force that was established during the special session to target structural tax and budget reforms for the 2017 fiscal session has been filled out and is already meeting to draw up legislative proposals.
The Task Force on Structural Changes in Budget and Tax Policy has met twice, once a week, so far.
Right now it’s primarily reviewing the current tax code and how changes from the last two sessions will impact it and incoming revenue.
Video poker bills make a comeback
A trio of video poker bills that passed by overwhelming votes last term but were vetoed by former Gov. Bobby Jindal at the urging of the Louisiana Family Forum are back in the mix for the regular session.
Jindal and LFF said at the time they were worried about weakening safeguards, despite the endorsements by the House and Senate.
HB 189 by Rep. Chad Brown, D-Plaquemine, and SB 339 by Sen. Danny Martiny, R-Metairie, would allow a truck stop casino to run its machines even when the attached restaurant is closed, under certain conditions.
HB 196 by Speaker Pro Tem Walt Leger, D-New Orleans, and SB 323 by Sen. J.P. Morrell, D-New Orleans, somewhat cuts the link between volume of fuel sales and the number of machines allowed at truck stops.
Another proposal concerns license suspensions and revocations. It’s inside HB 226 by Rep. Helena Moreno, D-New Orleans, and SB 322 by Morrell.
The legislation provides for a revocation hearing when an operator receives a third or subsequent underage violation, rather than an automatic revocation. It likewise allows operators to argue “extenuating circumstances” in such hearings.
Appropriations using sub-committee structure
The budget committee in the House is going back to a system that was last tried under former Speaker Jim Tucker.
This session the Appropriations Committee will go through HB 1 and the other budget bills using subcommittees.
Chairman Cameron Henry, R-Metairie, said there will be subcommittees on health and human services; general government; business development; infrastructure; public safety; and education.
“This will be helpful because it will allow members to get more specific information from the departments,” Henry said, adding, “Each of the subcommittees will make recommendations to the full committee.”
For the more intense hearings, like those for higher ed and the Department of Health and Hospitals, Henry said he’ll require the full committee membership to attend those subcommittee meetings.
Holden congressional bid possible
Wearing a seersucker suit and matching baseball cap like few others can, Baton Rouge Mayor Kip Holden confirmed at the legislative “Second Home Reception” earlier this month that he will be a candidate in the 2nd Congressional District this fall.
“I’ll be looking to officially announce maybe in April,” Holden said.
That’ll pit Holden against incumbent Congressman Cedric Richmond in a district that has long favored New Orleans pols but was redrawn to include parts of the greater Baton Rouge region and some rural parishes.
If another big name from the Crescent City gets in, the race could become competitive.
But Holden, who more recently told his hometown newspaper he is 90 percent sure he’ll run, will have to have a better fundraising showing than he did in the lieutenant governor’s race last year.
Some in Baton Rouge aren’t so pleased with his decision. Sources say former Congressman Cleo Fields recently hosted a party in Red Stick with political players from around the city where he touted Richmond’s experience and lightly voiced concerns about Holden’s candidacy.
They Said It
“I don’t want to get lost in the weeds of this.”
—Rep. Tanner Magee, R-Houma, on a marijuana pharmacy bill
“I’m assuming you don’t have a clothing line do you?”
—Rep. Truck Gisclair, D-Raceland, to Rep. Melinda B. White, D-Bogalusa, whose bill would give hunters a new color option, “blaze pink,” to wear during open gun season, in addition to safety orange
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