Louisiana Coalition Offers Tax Reform Strategy to Close Budget Gap

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April 18, 2011; Source: Canadian Business | It’s common to see nonprofit coalitions form to advance pieces of legislation, prevent budget cuts, or propose new spending for a particular population or service. What’s less common is for such coalitions to propose a comprehensive package of tax reforms to generate additional revenue and close the overall state budget gap. The “Better Choices for a Better Louisiana” coalition, nearly forty members strong, is doing just that.

Reeling from two straight years of deep state budget cuts in Louisiana, the coalition is proposing $940 million in tax hikes to help close the anticipated $1.6 billion shortfall in the state’s FY2012 budget.  Specifically, they want lawmakers to increase taxes on cigarettes, gambling and alcohol, and to reverse income tax cuts passed in 2007 and 2008. Most of these proposals will require a two-thirds majority vote in the upcoming legislative session to move forward.

Beyond the immediate funding crisis, the coalition is also advocating for a cost-benefit analysis of Louisiana’s 441 current tax exemptions, and for a moratorium on all new tax breaks until that review is complete.

With a Republican governor who has pledged “no new taxes” and Republican majorities in both legislative chambers, coalition co-founder Eddie Ashworth admits “I think we’re definitely pushing a rock up the hill”. In fact, today Governor Bobby Jindal reiterated through his spokesman, “We are opposed to tax increases and repeals of tax exemptions and tax credits, strongly opposed. We’ll veto it.”

So, what’s the point of advocating for such an ambitious, politically tenuous tax reform agenda? Louisiana’s Better Choices coalition includes many of the usual suspects who consistently argue for a vital government role in sustaining healthy communities: labor, health and human service, environmental, education, faith-based, consumer and community groups with a sprinkling of businesses. In proposing a comprehensive, detailed revenue-generating strategy rather than more narrow, perhaps more winnable issues, the coalition is choosing a very big hill indeed for pushing that rock. They’re aiming to reframe state budget options for the long haul.

There are similarly tagged “Better Choices for. . .” coalitions in New Mexico, Connecticut, New Jersey and Pennsylvania, making similar, comprehensive tax reform proposals. While it may take years for any discernible impact, we’ve already witnessed massive budget reframing to reduce the scope of government over the past 30 years. It remains to be seen whether these coalitions can influence a shift in the opposite direction. –Kathi Jaworski