Business groups and lobbyists are beginning talks to coalesce around a package of tax changes they hope to push through the Louisiana Legislature next year, as lawmakers face mounting shortfalls in the state’s beleaguered budget.
The groups are also faced with the tough task of educating businesses, their members and the public on complicated and policy-heavy tax minutiae that can be hard to digest.
“We’ve been reaching out to the other business groups in hopes that we can all be reading off the same page,” says Michael Olivier, president and CEO of the Committee of 100 for Economic Development, a business advocacy group. “What we want to do is work with our allies to see if we can come together with some alignment.”
Olivier says he has reached out to business groups like the Louisiana Association of Business and Industry, Blueprint Louisiana and even the Louisiana Budget Project, a left-leaning advocacy group. He’s also working with the Baton Rouge Area Chamber and other regional business groups and elected officials.
The Committee of 100, LABI and other groups have also been holding information sessions, often bringing Louisiana Department of Revenue Secretary Kimberly Robinson to explain what changes are on the table.
Olivier says his committee agrees with around 85% of the recommendations issued last month by a task force charged with examining the state budget. That committee, composed of 13 policymakers, business and industry leaders and tax experts, ended up with a set of proposals that would broaden the tax base, lower rates and eliminate some tax giveaways and deductions.
“I think that (business groups) have been cautiously optimistic,” said Robinson today at the Press Club of Baton Rouge’s weekly meeting. “There are some changes we have recommended that they support.”
To be sure, Robinson noted business lobbies will have a strong voice at the State Capitol next year when these ideas are voted on, and some of the proposed changes are potentially at odds with their priorities.
Now, Olivier hopes to bring a wide array of business lobbies and industry associations to get behind a more refined set of proposals.
“Simple, flat and fair,” says Stephen Waguespack, LABI president and CEO. “The rules have to stop changing each session.”
Waguespack says he is waiting for other task forces to come out with their recommendations before releasing LABI’s positions on tax reform as a whole. But he agrees the state should lower rates and broaden the base, while keeping intact certain incentives that he says spur economic growth.
Barry Erwin, president of the Council for a Better Louisiana and a member of the task force, stood behind the committee’s proposals, but acknowledges some of the rollbacks of business tax incentives are giving lobbyists and industry groups “heartburn.”
“I don’t think it’s all opposition at this point, but there are some red flags of concern,” he says. “I don’t think anybody is at a point now saying, ‘This is precisely what we want the Legislature to do.’”
The big-picture goal of business and policy groups will remain the same, Erwin says: to clean up the tax code and make Louisiana competitive with other states.
Jan Moller, director of the Louisiana Budget Project, says nearly all sides of the political spectrum agree that lawmakers needs to fix the systemic problems stemming from the state bringing in far less in revenues than it plans to spend. Where they will diverge, he adds, is if and by how much the state should increase revenue to fund things like higher education and health care, and how much it can cut spending.
Moller says he can come to agreement with business lobbies on loopholes like the federal deduction, which allows people to deduct their federal taxes from their state income tax liability, costing the state around $500 million per year.
“I’m grateful to (the Committee of 100), who have spent a lot of time on this issue and who have reached out to groups like ours who are not naturally in their orbit,” Moller says. “We don’t sign on to everything in their plan, but we certainly have a productive relationship and plan to continue those conversations in the future.”