Gov. Jeff Landry’s idea of wheeling a rented live tiger into LSU’s Tiger Stadium during Saturday’s gridiron contest against Alabama’s Crimson Tide didn’t exactly go as planned. Landry had hoped the caged feline would fire up the crowd as well as the players, but the home team lost in a 42-13 blowout.
That had to hurt the governor’s pride, but he’ll get over it.
The stakes are much higher as state lawmakers dive deeper into his proposed overhaul of Louisiana’s tax system.
The good news for Landry is that his complicated plan to swap lower individual and corporate income taxes for higher state and local sales taxes appears to be on track, at least in the early stages of the 20-day special legislative session that he called.
In recent days, the tax-writing House Ways & Means Committee briskly approved the easy parts of the plan — lowering and flattening individual and corporate income taxes and repealing the hated corporate franchise tax.
Those changes, combined, will reduce total state revenues by upward of $2 billion a year, though the impact on the annual operating budget will be much smaller. The corporate tax revenues mostly go into a pair of trust funds whose proceeds are dedicated to coastal restoration and infrastructure projects.
The Ways & Means committee will take up the not-so-easy parts of Landry’s plan on Tuesday or Wednesday — repealing dozens of sales tax exemptions, renewing and expanding the application of a 0.45-cent sales tax set to expire on June 30 and repealing a handful of tax credits adopted years ago to promote economic development.
If approved by lawmakers, those changes will impose state and local sales taxes on 41 items and services that are not currently taxed and cease or phase out various tax credits. The net effect, if all are adopted by lawmakers, would be an additional $1.4 billion a year to offset the income tax reductions and franchise tax repeal.
Two things make those parts of Landry’s plan a tough sell. First, each of the targeted exemptions and credits has a vocal constituency whose lobbyists are warning lawmakers against repealing their particular tax break. And second, the GOP’s legislative supermajority consists of scores of anti-tax conservatives. If even a handful of them balk at raising taxes, Landry’s plan could be in trouble.
As governor, however, Landry has powers of persuasion that lobbyists lack — a line-item veto, for one. Governors also exert enormous influence over which brick-and-mortar projects get funded, and how quickly those that are funded get started and completed.
This week, the House is expected to approve the tax reductions and send them over to the Senate. The fate of the tax increases is less certain.
In both legislative chambers, the key elements of Landry’s plan need a two-thirds vote of approval to take effect — including the governor's proposed constitutional amendment, which also needs voter approval next March. The amendment, if approved, would merge the two trust funds currently fed by corporate taxes, reduce the amount of annual contributions to those funds and make other significant changes to Louisiana's budgeting and taxation scheme.
Getting a two-thirds vote in each legislative chamber for such sweeping changes is never easy, even for a popular governor who's unafraid to twist arms to get his way with generally pliable lawmakers. Landry has learned that lesson already, particularly in his dealings with senators.
On the other hand, inside the Capitol, Landry is an uncaged tiger that few inside or outside the rails are anxious to poke.
It will be interesting to see how this, Landry's third special session since taking office in January, plays out.