DALLAS — Legislative efforts to phase out Louisiana's income tax were tabled Monday by chairman of a key House committee with the support of Speaker Chuck Kleckley.
Rep. Joel Robideaux opened the hearings by asking for deferral of 25 tax bills that included eight measures to repeal or phase out the state personal income tax, eight to eliminate the corporate income tax, four to lower income tax rates, and five to raise the state tax on cigarettes.
"My preference is that we should indefinitely defer consideration of these bills," Robideaux said at the beginning of what was to be two days of hearings on the tax bills by the House Ways and Means Committee.
The move means the end of tax reform measures in the 2013 Legislature, he said.
"Unless the members come to me and demand that their bills be heard because they've had a change of heart, then I think we're done for the session," said Robideaux, R-Lafayette.
"This is a difficult, but I believe necessary action."
Gov. Bobby Jindal had proposed ending the corporate and personal income taxes as of Jan. 1 and raising the state sales tax to 6.25% from the current 4%. Jindal said last week he would defer the tax swap, but urged lawmakers to eliminate or phase out the income tax.
There was little support in the committee to cut the income tax without an accompanying plan to offset the $3 billion of annual revenue that would be lost, Robideaux said.
"We would have had to bring the public in from all over the state for hours and hours of hearings on bills that had no chance of passing," he said. "Knowing that the end result was going to be defeat of the bills, I just didn't think it was a necessary issue."
Kleckley said he supported Robideaux's decision to table the tax bills after the two discussed the situation over the weekend.
""It would not be fiscally responsible if we moved a bill removing the state income tax without replacing the revenue," Kleckley said. "From the beginning, my priority has been to make sure we have precise numbers and that we replace the revenue. "
Jindal said he disagreed with Robideaux's action in tabling the tax bills.
"Eliminating income taxes is the single best thing we can do to create jobs in Louisiana," Jindal said. "If the Legislature decides not to act, I think it will be a missed opportunity."
Rep. Hunter Greene, R-Baton Rouge, said he would voluntarily withdraw House Bill 271, which would have repealed the income tax over 10 years through annual rate cuts of 10%.
Concern over a potential $1.5 billion revenue shortfall in fiscal 2014 led to the withdrawal, Greene said. A review of the measure by the Legislative Fiscal Office said the phase-out would cut revenues by $4.1 billion over the first five years.
The Louisiana Legislative Black Caucus said it would withdraw a package of tax bills after the fiscal analysis found the proposals would result in a net loss of revenue.
Rep. Katrina Jackson, D-Monroe, said the caucus still supports a proposal to increase the state tax on a package of cigarettes to 68 cents from the current 35 cents. The bill would allocate 40% of the revenues to Medicaid, 50% to state medical schools, and 10% to reducing liabilities of state pension plans.
