(Baton Rouge – May 25, 2011) As Louisiana faces a $1.6 billion budget deficit, the Legislature has advanced bills that would eliminate Louisiana's corporate and personal income taxes. Another would make it even more difficult to pass budget bills in the House of Representatives. This is apparently being done without significant opposition from the governor’s office.

Better Choices for a Better Louisiana, a broad-based coalition of businesses and nonprofit organizations represents environmental, human welfare, healthcare, labor, faith-based, social justice, and civil rights interests, opposes these efforts to undermine the fiscal integrity of the state. Nearly half of the state’s general fund revenues would be lost without the corporate and personal income taxes.

According to the Better Choices coalition, this radical and ill-timed political maneuvering risks driving Louisiana’s budget over the cliff.  At a time of unprecedented state deficits, Louisiana needs a balanced approach to resolving its fiscal problems. That includes additional sources of revenues as well as prudent cuts in spending, spokespersons said.

Two measures, House Bill 633 and House Bill 634, both by state Representative Hunter Greene, are awaiting passage by the House. Senate Bill 259, by state Senator Rob Marionneaux, is on the Senate calendar. These bills, if enacted, would eliminate the state’s personal and corporate income taxes. When fully effective, they would cost to the state billions of dollars annually.
According to the Legislative Fiscal Office, HB 633, HB 634, and SB 259 would eliminate almost half of the state general fund that supports higher education, public schools, state prisons, public hospitals, Medicaid insurance, and other functions vital to Louisiana’s working families and the state’s economic future.

Although the House and Senate bills have different phase-in periods, both versions, when fully implemented, would cost the state over $3 billion annually.  The cost in FY2012 would be over $600 million in the Senate version. (Floor amendments to HB 634 would delay the effective date until the 2013 budget year.) This is in addition to the $1.6 billion budget shortfall the state is already facing in FY2012.

Creating the potential for further political mischief is House Resolution 27 by Representative Brett Geymann. The resolution would require a two-thirds vote for the House to appropriate one-time money to pay for ordinary recurring expenses.

In effect, this resolution would require a two-thirds vote by the House to pass the state’s budget in any year in which one-time monies are being used to pay recurring expenses.  The budget bill currently being considered by the House contains significant one-time monies for recurring expenses and, thus, would require a two-thirds vote.

Better Choices for a Better Louisiana opposes this resolution.  Budget debates should be on the merits of the budget, not be held hostage to the political maneuvering that obtaining a two-thirds vote would require.

Leaders of the Better Choices for a Better Louisiana coalition were quick to condemn these actions.

“As Louisiana struggles to escape the bottom of nearly every metric of human need, we deserve only the best efforts of our elected leaders," said Ann Silverberg Williamson, director of the Louisiana Association of Nonprofit Organizations, a BCBL founding member. "We have to ask if implausible and potentially disastrous political theatrics like this meet that high standard."

“Neither the Legislature nor the Governor are offering balanced solutions or proposing sources of new revenue in response to one of the worst fiscal crises in state history,” said Steve Monaghan, President of the Louisiana Federation of Teachers and a founding member of Better Choices for a Better Louisiana. “These proposals will sacrifice fundamental services that provide a better future for working families in Louisiana.”

“Louisiana desperately needs responsible political leadership. If these bills pass it would be an unmitigated disaster for our state, turning the state’s fiscal crisis into fiscal Armageddon,” said Eddie Ashworth, Director of the Louisiana Budget Project.

“Louisiana citizens deserve a functional government that provides quality essential services such as health care and higher education, Melissa Flournoy, Louisiana Progress director said. We cannot cut our way to excellence.”

Better Choices for a Better Louisiana —a broad coalition of organizations representing more than a half-million people in the state—advocates for a balanced, transparent approach to solving Louisiana’s fiscal crisis rather than relying solely on short-sighted cuts to services needed by working families.  The coalition believes the state cannot sustain another deep budget cut before risking serious, long-term damage to the state and its people.