It’s time to even the playing field for producers of domestic and foreign oil when it comes to state taxes, Sen. Robert Marionneaux Jr., D- Livonia, told the Baton Rouge Press Club today. Marionneaux is proposing a bill that would reduce the 12.5% severance tax on Louisiana domestic oil producers and landowners to 3%. The proposed bill would also impose a 3% tax on refineries that use foreign oil, including that which is produced from land and coastal wells located in other states or other countries.
The change would reduce the amount of tax garnered from domestic oil to $132 million from $509 million per year, but would net the state $1.5 billion annually from foreign oil. That cash flow would then be split into thirds, which would be earmarked for coastal restoration, infrastructure and education. Marionneaux acknowledged that prices at the pump would likely rise as a result of the tax change.
Marionneaux says if the bill passes muster in the House and Senate, it will require Louisiana voters to assent to a constitutional amendment this fall. Because the state Constitution prohibits taxes from being passed in this legislative session, legislation implementing the measure would have to wait until next year if voters are in favor of it.
“I suspect if this ever gets to the voters, it will pass,” he says. —Emma James
