Treasurer suggests tax overhaul be voted on in statewide election

State Treasurer John Kennedy said Monday that Gov. Bobby Jindal should put his tax plan to a vote of the people, instead of vetting it only with legislators.

“This is going to touch every single business and every single taxpayer and every single consumer. This is where democracy works at its best,” Kennedy said in a telephone interview.

In response, Jindal said in a prepared statement that his plan does not involve any proposed constitutional amendments, which would require votes of the Legislature as well as the people.

“These ideas will be debated thoroughly during the legislative session, and Louisianians will have plenty of opportunities to provide input on tax reform,” the governor’s statement says.

Jindal wants to eliminate the state’s personal income and corporate taxes. To avoid a huge impact on the state operating budget, he is proposing an increase in the state sales tax. Services currently not subject to a state sales tax also now would be taxed at the new rate of 5.88 percent.

His plan recently drew questions from a Baton Rouge-based public research group and more than 250 ministers.

The Public Affairs Research Council, a membership group that researches public policy issues, questioned some of the Jindal administration’s numbers. For instance, PAR complained that the governor’s plan is based on personal income tax numbers from a couple years ago when the economy was coming out of recession and the receipts were lower, but uses sales tax collections that reflect a more robust economy.

Religious leaders from across Louisiana claimed last week that the Jindal administration underestimated the expected tax burden on families by omitting part of a proposed state sales tax hike from calculations.

Kennedy said he spoke Monday to a business group in Alexandria and received “a million questions” about the proposed state tax code changes.

“Just about every taxpayer will look at it and say, ‘There’s parts I like. There’s parts I don’t like,’ ” Kennedy said. “So let people vote.”

Kennedy said former Govs. Buddy Roemer and Mike Foster backed sweeping tax changes that went before voters.

In 1989, Roemer called legislators to Baton Rouge for a special session on rewriting the tax code. The statutory changes depended on the passage of a constitutional amendment.

The proposed changes included lowering the sales tax, giving tax breaks to businesses and increasing income, motor vehicle, cigarette, wine and natural gas severance taxes.

Fifty-five percent of voters rejected the changes. Backers later said the issue was too complex for voters.

Foster had more success with a plan he backed in 2002 to cut sales taxes and increase income taxes for many wage earners.

The tax swap, called the Stelly plan for the legislator who pitched it, banned state sales taxes on groceries, home utilities and prescription drugs. In exchange, income taxes increased for many wage earners — an increase legislators later unraveled.

The Stelly plan involved a constitutional amendment that required a vote of the public.

Only a partial draft of the legislation for Jindal’s tax plan has been released.

The draft calls for a number of tax breaks to disappear, including exemptions for Habitat for Humanity, Councils on Aging, Mardi Gras krewes and actor Brad Pitt’s home building foundation.

Other parts of the plan just have been discussed by the Jindal administration in presentations to legislators.

Kennedy said he likes some parts, such as the governor’s proposal to eliminate the state’s income taxes.

Other parts, he said, give him pause, such as creating what he characterized as entitlement programs through rebate programs for poor households and certain retirees. He said he also has concerns about Louisiana having the highest combined state and local sales taxes under the governor’s plan.

“There will be winners and losers. I hope the governor will release the bill and have a full debate. We need to let the people vote on this,” Kennedy said.