Jindal tax proposal discussed at panel

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ARTHUR D. LAUCK /
Advocate staff photo by ARTHUR D. LAUCK -- Tim Barfield, executive counsel of the Louisiana Department of Revenue, told business leaders Tuesday that Louisiana hasn't looked back since developing a state income tax.

As he builds his tax package, Gov. Bobby Jindal wants to keep economic development incentives in place and forego any property tax changes, a key aide said Tuesday.

Tim Barfield, the state Revenue Department’s executive counsel, gave a skeletal description of the package to the Louisiana Association of Business and Industry at the Crowne Plaza in Baton Rouge. His presentation followed last week’s announcement that the governor wants to eliminate the state’s personal income and corporate taxes in exchange for heftier state sales taxes.

The proposal will be debated in the legislative session that starts in April.

Barfield was part of a morning panel that focused on upcoming issues, including tax system changes and the state budget process.

The governor’s package likely will come together shortly before session, Barfield said.

Just how much of a sales tax increase the governor advocates is unclear. Details on consideration for the poor and how the administration will stop a stampede toward partly tax-free Internet shopping are unknown.

Barfield said those problems will be worked out in closed door meetings with stakeholders and legislators.

“We’re going to have to come to some consensus if we’re going to get anywhere,” he said.

Barfield said property tax increases are not part of the discussion. The elimination of severance taxes on the state’s natural resources also are not included in the conversation, he said.

Instead, the Jindal administration’s focus is on the hundreds of exemptions that lower Louisiana residents’ tax bills, he said.

“Most of the discussion is about what exemptions should be in or out,” Barfield said.

For example, the state grants a number of economic development tax incentives designed to encourage business growth.

The governor wants to keep most of those intact on a targeted basis in some undetermined form, Barfield said.

Last week, the Institute on Taxation and Economic Policy predicted the governor’s overall plan “is virtually guaranteed to have a regressive impact regardless of whether or not a low-income relief program is added to the package.”

The institute, a nonprofit research organization with offices in Washington, D.C., Wisconsin and North Carolina, said the bottom 80 percent of Louisiana residents would see a tax increase averaging $395 for those with an average income of $12,000 a year.

Meanwhile, the Tax Foundation, a Washington, D.C., thinktank, said Jindal’s tax plan could raise Louisiana from 32nd to fourth on the organization’s list of tax structures.

Barfield did not mention the institute by name during his comments at LABI’s meeting.

However, he made reference to misinformed comments regarding the likely state sales tax increase.

By keeping intact state sales tax exemptions for food, household utilities and prescription drugs, the proposal is progressive, Barfield said.

He said sales taxes are a fair way to grow the economy.

Barfield acknowledged there are legitimate concerns about state taxes not collected through Internet sales. He said the administration is tracking federal legislation on the issue and wants to level the playing field.

In the past, the governor opposed efforts to step up tax collections on Internet purchases. Jindal said in 2011 that he opposed burdening Louisiana families with additional taxes.

Following Barfield in the panel discussion Tuesday was state Rep. Joel Robideaux, who is leading a study group examining the myriad of tax exemptions on the state’s books.

Robideaux, R-Lafayette, said he is getting questions about whether the Revenue Study Commission was an exercise in futility given the governor’s tax announcement.

He said he thinks some changes still are needed even if a number of the exemptions disappear with the sweeping away of personal income and corporate taxes.

For one thing, Robideaux said, the Legislative Fiscal Office likely needs longer to study the financial impact of proposed legislation.

State Rep. Brett Geymann, R-Lake Charles, said he wants to bring more transparency, prioritization and constitutionality to the state budget process.

He said accounting gimmicks, the use of one-time, or nonrecurring, money and budget contingencies are leading to cuts in the middle of the state budget year.

Editor’s note: The story was changed on Jan. 16 to correct the day in the first paragraph.