DALLAS — Louisiana Gov. Bobby Jindal ended his quest to scrap the state income tax and replace it with a higher sales tax.
He is giving up on a higher sales tax that would be expanded to include many services, Jindal said, but the fight will continue for an end to Louisiana's corporate and personal income taxes, he said Monday as the 2013 Legislature convened in Baton Rouge for a two-month session.
Jindal had wanted lawmakers to end the corporate and personal income taxes on Jan. 1 and offset the lost revenue with an increase in the state sales tax rate to 6.25% from the current 4%.
"We're going to pull that plan but at the same time, I'm not the kind of guy that just wants to take my ball and go home and complain," Jindal said at Monday's opening session.
Legislative proposals already filed to phase out the income tax over five to 10 years or even quicker would be acceptable, Jindal said.
"Send me that bill to get rid of those taxes," he said. "Send me that bill. We must not leave this session without getting that work done."
Opposition to the tax swap came swiftly from business groups, political opponents, and religious leaders after Jindal outlined what he said was a revenue-neutral $3.6 billion plan before a joint session of the House Ways and Means Committee and the Senate Revenue and Fiscal Affairs Committee on March 14.
There is significant public and legislative support for ending the income tax, Jindal said, but many question the timing and extent of the proposed swap.
"I listened to what the people of this great state had to say," he said. "I want you to know that's certainly not what I wanted to hear, but I heard those comments.
"I'm going to do something politicians don't normally do," Jindal said. "We're going to adjust our course."
Rep. Joel Robideaux, R-Lafayette, chairman of the House Ways and Means Committee, said he supports an end to the income tax but only if the lost revenues can be recouped elsewhere.
"I agree that the repeal of the income tax is a good idea," he said. "I also agree it needs to be paid for."
Robideaux sponsored the 11 bills of Jindal administration's original tax policy that linked the demise of the income tax with the revised sales tax. The changes would have not only raised the sales tax but also expanded the sales tax to more than three dozen services not currently taxed while eliminating many existing tax credits and exemptions.
The Louisiana Association of Business and Industry opposed the plan over a proposed tax shift of $500 million a year to businesses.
Dan Juneau, president of the advocacy group, hailed the demise of Jindal's tax swap.
"Fashioning a large revamp of the tax code requires clear and convincing data, a lengthy education campaign, and a general perception of fairness by the taxpayers," he said.
"While Gov. Jindal gets credit for thinking boldly, the abandonment of the tax swap proposal gives both his administration and the Legislature the opportunity to focus more exclusively on dealing with large problems looming in the state budget," Juneau said.
There was scant support for Jindal's proposed 62% increase in the state sales tax rate, said Rep. John Bel Edwards, D-Amite.
"There's no doubt there was no support in the state of Louisiana, in the business community, in our churches, even in either party for the highest sales tax in the nation," said Edwards, leader of the House Democratic minority and an announced candidate for governor in 2014.
Term limits prevent Jindal, often mentioned as a GOP presidential contender, from seeking re-election next year.
