Gov. Jeff Landry's tax plan won't raise household bills, analysis says
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Louisiana households won't see much of an overall change in their tax liabilities in Gov. Jeff Landry's new plan, according to the first independent analysis of his tax reform proposal, released Monday.
Why it matters: That analysis doesn't take into account the corporate tax cuts Landry's plan includes, and there are still some major questions about how Louisiana will pay its bills.
The latest: A separate preliminary analysis by the Louisiana Legislative Fiscal Office, which also circulated amongst state lawmakers Monday, indicates that the corporate tax cuts will result in eye-popping net losses.
- Axios New Orleans obtained copies of the preliminary fiscal notes, which have not yet been made public.
- In those documents, the Fiscal Office estimates Landry's tax plan will result in a net loss of more than $740,000,000 by the 2026-2027 fiscal year.
Yes, but: That doesn't equate to a $740,000,000 budget deficit because a large portion of corporate taxes feed into a state savings account called the Revenue Stabilization Trust Fund.
What they're saying: Still, Jan Moller, the executive director of Invest in Louisiana, an economic policy think-tank in Baton Rouge, says his organization worries Landry's tax plan will lead to long-term state budget deficits that could result in structural service cuts.
Catch up quick: Landry unveiled his tax plan in a press conference earlier this month, saying his overall goal was to move the state toward eliminating income tax altogether over the coming years.
- His plan starts that transition by flattening income tax brackets to 3% for all households, making a 0.45-cent sales tax permanent, expanding sales taxes into additional categories and digital products, eliminating the corporate franchise tax and flattening the corporate income tax.
Zoom in: The independent analysis was released by RESET Louisiana, a collective between the nonprofits Council for A Better Louisiana, the Public Affairs Research Council of Louisiana and the Committee of 100 for Economic Development.
- Greg Albrecht, who served as the Louisiana Legislative Fiscal Office's chief economist for three decades, penned the document.
- It focuses on the estimated impacts of Landry's changes to state sales and income tax. Those categories make up 60% of Louisiana's tax collections, RESET notes.
- The RESET analysis indicates Landry's tax plan is also "more fair, slightly, to low- to moderate-income households, across the board," Committee of 100 CEO Adam Knapp tells Axios New Orleans.
What's next: Landry hopes to sell Louisiana legislators and, later, voters on the new tax structure.
- He'll start by calling a special legislative session next month.
Go deeper:
- Read RESET Louisiana's analysis summary and full report.
- Read the proposed bills in Gov. Jeff Landry's tax plan.
- Gov. Landry's op-ed supporting his tax plan, for The Times-Picayune