Louisiana won’t see constitutional changes to tax and budget policy anytime soon

Louisiana lawmakers won't call themselves into a special session until at least 2025. (Photo credit: Wesley Muller/Louisiana Illuminator)

Voters won’t be deciding on constitutional changes to the state budget or tax structure anytime soon now that Louisiana lawmakers have decided not to meet again for the rest of 2024 .

Despite the efforts of Gov. Jeff Landry, conservative activists and one particularly influential GOP donor , legislators could not be convinced to return to Baton Rouge to make even small changes to budget and tax laws contained in Louisiana’s 50 year-old constitution this year.

For months , Landry has said the state needs to look at constitutional changes to make it easier for the state to cope with a state sales tax cut taking place next July. The transition team Landry set up after winning the gubernatorial election last fall included a committee focused on constitutional change.

Yet Landry has never been particularly specific about what changes he wanted to support and the lawmakers’ decision not to meet before the end of the year represents a nail in the coffin for any constitutional reform efforts in the near future.

“The Governor is leaving this up to the legislature. If they do not want a special session, we will not do it,” Landry spokeswoman Kate Kelly said in an email.

Voters statewide need to approve constitutional changes. After the statewide elections taking place this November and December, there won’t be another one until 2026. That means any constitutional amendments going before the ballot would require an expensive, statewide special election, which Landry and legislators seem reluctant to hold.

Also, as lawmakers have been saying for weeks , they need more time to build consensus over what approach to the state’s tax and budget structure to take.

“We’ve made a lot of progress, but it’s a very complicated issue that requires continued discussion,” Senate President Cameron Henry, R-Metairie, said in a written statement. “The public deserves time to see our plans and understand the implications for their families and their businesses. We want to get this right.”

In addition to statewide voter approval, constitutional amendments require a two-thirds vote from each chamber of the Legislature. Lawmakers haven’t seen a tax law package yet that could meet that threshold for approval.

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House Speaker Phillip DeVillier, R-Eunice, has emphasized legislators will be holding extra meetings over the next several months to study budget and tax policy in order to prepare for future legislative action. Lawmakers are interested in tackling Louisiana’s high insurance rates more comprehensively on top of budget and tax challenges, he said.

Landry’s office also said Wednesday the governor has been meeting with legislators to discuss a tax structure overhaul in more detail.

Next year’s sales tax cut, which lawmakers agreed on in 2018, will cause a chronic budget shortfall of hundreds of millions of dollars annually unless lawmakers vote to keep taxes level or make changes to government spending.

Over the past decade, the Republican-controlled Legislature has voted twice to adopt a higher sales tax rate rather than impose state budget cuts, but newer lawmakers are more conservative than those who voted for those tax hikes.

In an interview earlier this month, DeVillier said he didn’t think there would be enough votes in the Louisiana House to reverse the sales tax cut scheduled for next year.

There are still a number of law changes Louisiana Revenue Secretary Richard Nelson, a Landry appointee, has suggested lawmakers could put into place without constitutional amendments, Nelson said in an interview Thursday.

Almost all of the state’s 224 state sales tax exemptions, some of which Nelson would like to eliminate, don’t require a constitutional change. Many corporate tax incentives are mostly contained in regular state law and wouldn’t require voter approval, he said.

In addition to dealing with Louisiana’s budget shortfall, Nelson hopes to simplify Louisiana’s tax code, in part to improve the state’s rating with national groups who rank states based on their  tax policies. Business leaders have said Louisiana’s low ratings with such groups deters companies from investing in the state.

To what extent Landry backs Nelson’s proposals remains unclear however. When asked if the governor supported Nelson’s suggested tax changes, Landry’s office responded with a general statement.

“Gov. Landry supports bold tax reform that will make our state more competitive,” said Kelly in an email replying to the question.

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The post Louisiana won’t see constitutional changes to tax and budget policy anytime soon appeared first on Louisiana Illuminator .