The group tasked with crafting a long-range plan for stabilizing Louisiana's turbulent state finances has released its list of recommendations for the state Legislature to consider next year.
The state should improve its revenue forecasting and evaluate contracts for efficiencies; reduce its sales tax and broaden the tax base to include some services, similar to what has been done in Texas and elsewhere; eliminate deductions for federal personal and corporate income taxes; and end locally assessed ad valorem taxes on inventory and the corresponding state-funded tax credit that corresponds with it, among other ideas.
“We recommend implementing this full package as a comprehensive solution to stabilize the state’s finances,” said task force co-chair Jim Richardson. “A piecemeal approach will fall short of that goal.”
But the recommendations came as little surprise, and it remains to be seen how much traction the package will gain as its vetted by lawmakers.
The Legislature is expected to focus its 2017 session on addressing the state budget, with the goal of ending the repeated cycle of shortfalls seen in recent years.
Gov. John Bel Edwards, a Democrat, expressed appreciation for the group's work, but said that the recommendations have all been made before to hesitant legislators.
"The bottom line is, there are no surprises," Edwards said after a news conference Wednesday.
Edwards said that the Legislature, faced with data from economists and fiscal advisers, could have acted earlier this year on some of the items. Lawmakers met in two special sessions this year to address budget stresses.
Groups across the political spectrum with interests in the state economy, swiftly weighed in on the final task force report upon its release Wednesday. Most commended the task force for its months of work, but it's clear that there isn't universal backing for the full slate of recommendations.
The Louisiana Association of Business and Industry, the largest business lobby in the state, released a statement in support of some of the recommendations, but noting that other elements "require additional vetting and debate" and noted that the release is only the start of a lengthy process.
“While the Task Force has made numerous suggestions to the tax code, we must begin to acknowledge that even with an ideal tax code, spending projections are still likely to outpace revenue growth in the years to come," LABI President Stephen Waguespack said.
Meanwhile, the Louisiana Budget Project, which advocates on behalf of low and moderate income people, said "more is needed to put Louisiana's budget back in the black."
"A preliminary analysis from the Institute on Taxation and Economic Policy shows that even if the Legislature agrees to the sales tax and income-tax changes recommended by the task force, Louisiana will still not have sufficient revenue to make the investments needed," LBP said in a statement.
The Council for a Better Louisiana, meanwhile, released a statement urging people to review the recommendations "in a holistic way." CABL President Barry Erwin served on the group.
"Are the recommendations in the report perfect? It is likely that no member of the task force would say that they are," CABL said in a statement. "But that’s probably a good thing because it is an indication that the task force was grappling with some extremely difficult issues and yet still found a way to address them. Hopefully, that bodes well for the future."