Jindal open to ideas on phasing out income taxes

Advocate staff photo by ADAM LAU -- Gov. Bobby Jindal speaks Thursday to the press. Show caption
Advocate staff photo by ADAM LAU -- Gov. Bobby Jindal speaks Thursday to the press.

In his first public comments since scrapping his tax plan, Gov. Bobby Jindal said Thursday that he does not want to put conditions on legislators as they consider alternative proposals.

The governor directed legislators earlier in the week to send him a bill for eliminating state income tax.

At issue is whether the legislation needs to be coupled with a blueprint for replacing the revenue that state government would lose.

The Legislative Fiscal Office estimates that a 10-year phaseout of the state personal income tax alone would reduce state revenue by $4.1 billion within five years.

Two years ago, when a similar proposal surfaced without a solution for replacing the revenue, the governor characterized it as irresponsible.

On Thursday, Jindal said he is delighted that legislators once again are considering a repeal. “Right now, the first week of session, I’m more than happy to talk to legislators. I’m not putting up any veto threats. I’m not voicing any opposition,” he said.

Jindal wanted to eliminate the state’s personal income and corporate taxes beginning in January. The revenue would have been replaced by increasing the state sales tax rate, taxing currently untaxed services and nearly tripling the state’s cigarette tax.

Religious leaders, public policy groups, the business community and the governor’s own accounting consultant raised concerns about the proposal. They worried the poor would be adversely impacted and that businesses would carry the bulk of the added tax burden.

Amid the opposition, the governor withdrew his proposal Monday — the opening day of the nine-week legislative session.

He asked legislators to instead agree on their own proposal to consider. A number of bills involving state income tax are circulating.

House Speaker Chuck Kleckley, R-Lake Charles, told reporters Thursday that there is strong support for eliminating the state income tax but that it needs to be phased out, possibly over 10 years.

Kleckley said one idea is to pass a “framework” bill this year that spells out parameters that would start taking effect in 2016, with a certain percentage of the tax eliminated yearly.

He said one advantage of such an approach would be that, if the state faced an oil spill, hurricane or other emergency, the timetable could be slowed.

Kleckley said Jindal on Monday urged lawmakers to send him a tax bill. “I think the governor opened the door for us to show our independence in the House,” he said.

Kleckley said any such measure should be revenue neutral. “I think it would be very hard to pass a piece of legislation out of the House that does not replace the money,” he said.

The speaker said bills on the issue will start being heard in committee on Monday.

House Democratic leader John Bel Edwards, of Amite, said Jindal should require a revenue plan on any income tax phase out he signs into law.

The Legislative Fiscal Office looked at House Bill 271, one of several tax code bills up for consideration. Sponsored by state Rep. Hunter Greene, R-Baton Rouge, the legislation would begin to phase out income tax on Jan. 1, 2014. The tax would be eliminated entirely for the 2023 tax year.

For the fiscal year that starts July 1, state revenue would be reduced by $78 million. By the time the tax disappears entirely, the office said, the impact to the state would be a loss of $4.6 billion. That would be about half of the state general fund that pays for health care and higher education.

Will Sentell of the Capitol news bureau contributed to this report.