Had Louisiana’s fall elections remained at their original dates, early voting for the general election would be in the offing. That has been kicked back over a month because of the change necessitated by Hurricane Ida, but mail-in voting has been open for about a month, so now’s as good as any time to review the four constitutional amendments on the ballot now scheduled for Nov. 13. Regardless of when, these offer some easy decisions.
Amendment #1 – creates a commission consolidating two existing overseers of the state’s highly decentralized sales tax collection system that would permit centralized filing of sales taxes then distributed to state and local entities, after implementing legislation passes. This would ease greatly business compliance costs, both in administrative submissions and in dealing with multiple taxing agency jurisdictions, such as with audits. It’s a slam dunk. Yes.
Amendment #2 – sets the stage to engineer a tax swap of lower income taxes for inability to deduct federal income taxes from those. The amendment itself sets the individual rate ceiling at 4.75 percent, down from 6, and jettisons required deductibility, but a whole raft of companion legislation triggers on its passage. Under this legislation, the statutory deductibility disappears; individual rate brackets go from 6 to 4.25, 4 to 3.5, and 2 to 1.85 and could go lower the higher the growth rate of state revenues; excess itemized deductions for them disappear except for medical expenses; corporate rate brackets go from five to three by eliminating the highest ones and the rest diminish by a half point; and the corporate franchise tax goes away for the majority of filers and for those remaining still paying can go down further depending upon future state revenue growth.
The changes should come out initially largely revenue neutral and then subsequently deliver a slight break, meaning discrete winners and losers. Winners are most filers; losers are those who have a lot of deductions largely confined to unincorporated business activities. The change also would decouple state fiscal policy from the federal government, as any change in federal tax rates trickles into deductibility, bringing greater state control over its own finances and budgeting. If not a slam dunk, it’s close. Yes.
Amendment #3 – allows five levee districts in south Louisiana to levy property taxes without having to petition their residents. Districts created anew since 2005, unlike those that came into being previous to then, can’t levy up to 5 mils (2.5 in Orleans). One born since then already went to voters to secure 5 mils. While it may not seem fair that 18 other districts have that power and these don’t, accountability is increased by authorizing taxation only by voter approval, and clearly that isn’t impossible to achieve with a justified case as the St. Mary Levee District already has proven. No.
Amendment #4 – permits greater flexibility in budgeting in times of deficit, by increasing the maximum redirection to the general fund from most dedicated fund accounts from five to ten percent (after a mandatory 0.7 percent reduction in general fund appropriations). The state has hundreds of such funds, most really unnecessarily restrictive favoring some special interest, many stuffed with money only available for low priority purposes of such amounts relative to the permitted used that it never all will be spent. Ideally, the Legislature either would release the dedications, although history has shown logrolling tendencies make this rare, or would appropriate out of these (a “funds sweep”), but when it’s not in session this isn’t possible as a deficit-avoidance strategy. Raising the maximum level to ten percent is an appropriate response creating greater flexibility that keep higher-priority needs fulfilled under times of fiscal stress. Yes.