Tax Reform & the TFSCBTP
Former Louisiana governor Buddy Roemer recently penned a guest column in the Advocate calling for sweeping tax reform in Louisiana. His lamentations about the problems were quite familiar to anyone who has been paying attention to the state’s budget crisis lately.
Our university system is antiquated and built on the principle of quantity, not quality.
Our economic conditions are not diverse and innovative.
We are dependent on individuals for spark, rather than on systems. …
The working poor are in ruins in Louisiana, underfinanced and underappreciated.
Our kids are leaving the state to find jobs and opportunity.
On and on it goes. Things are a fraction of their true value: newspapers, television stations, law firms, partnerships, car dealerships.
The Committee of 100 for Economic Development, known as “Louisiana’s Business Roundtable,” commissioned a major reform study last year by the conservative-leaning DC think tank The Tax Foundation called “Louisiana Fiscal Reform: A Framework for the Future.” I happened to be in attendance at the event at LSU where the report was first shared, which was followed by a road show promoted by business leaders and university presidents across the state. At first, I figured the report would likely be very “business-friendly” given those involved in writing and paying for it, but I was nonetheless impressed that C100 was taking a leadership role in calling for structural reform.
The comprehensive report (found here) presents a broad menu of reform options across the four major taxes – sales, personal income, corporate income, and property and related taxes. In each area, it offers several options and explains the effects each one would have. Importantly, one of the stated overarching goals of the report is to change Louisiana’s tax structure to match the diversification of the economy and reduce the volatility associated with too much reliance on one sector (oil). While I don’t agree with all the options presented, I think the report is a step in the right direction as our policymakers attempt to tackle this complex problem, and the information it provides will likely serve as a jumping-off point for many of the necessary discussions that will take place over the next couple of years.
Another step in the right direction is the creation of the Tax Force on Structural Changes in Budget and Tax Policy, or TFSCBTP for short. Elizabeth Crisp wrote a nice article on the new independent board of experts.
The new task force’s official charge is “to make recommendations of changes to the state’s tax laws in an effort to modernize and enhance the efficiency and fairness of the state’s tax policies for individuals and businesses, to examine the structure and design of the state budget and make recommendations for long-term budgeting changes.”
The group includes well-known economists, leaders of good government groups, and political players from the civic, business, and labor sectors. It has already met three times with another meeting scheduled on April 8. Because any major reforms will need solid backing from each of these sectors in order to be politically feasible, this group will likely play an important role in advising the governor and legislature on reform priorities.
Maybe everyone is now on the same page in terms of recognizing the depth and breadth of Louisiana’s fiscal challenges. It is good to see so many influential voices at the table as well as the cooperation between government and the other sectors. I hope this is the start of a conversation that will lead to lasting, long-term change for the state budget and tax system.