Budget committee chair cautious on ending corporate income tax

After days of budget hearings last week, the chairman of the Joint Legislative Budget Committee has concerns about the wisdom of doing away with the state’s corporate income tax, which is one of the tenets of Gov. Bobby Jindal’s proposed tax reform plan. Sen. Jack Donahue, R-Mandeville, who also chairs the powerful Senate Finance Committee, tells Daily Report he’s not convinced it makes sense to do away with hundreds of millions in revenue the corporate income tax generates at a time when the state is facing a $1.3 billion shortfall, including $800 million worth of cuts to health care. “We got $250 million from corporate income taxes this year, which helped us finish off the year,” says Donahue. “We keep cutting and cutting and cutting and looking at all the money we give away. … I don’t want to raise taxes, but I do want to look at all the options and sources of revenue.” Donahue points out that with so much industrial construction and expansion under way in the state, Louisiana is in better shape than many states, and yet is still faced with a tremendous hole in its budget. While the Jindal tax reform plan is supposed to be revenue neutral, Donahue says he is not sure the Legislature will be willing to take that risk. “I like the idea of making Louisiana more competitive,” Donahue says, “but there needs to be a little balance; because if we get rid of the income taxes and things don’t work out, we’ll never get them back.” —Stephanie Riegel