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Newsletter: Budget PDF Print E-mail
Monday, April 13 2015 - 2:42 pm

As your Senator and as Senate Finance Committee Chairman I want to take a moment to keep you apprised of the current financial status of our state as the legislative session approaches.

The Governor just released his budget, and although he has tried to moderate the negative side of the presentation, it is still a grim picture. 

Are these the right solutions for the state? Where will we end up? I’m not sure yet. These are difficult challenges and obviously there are many considerations and moving parts in the budget process.

I truly believe the state is taking in enough money from taxpayers to provide the services we need. I am hopeful the Legislature can find a way to bring a businesslike, common sense approach to prioritizing the needs of our state.

I’d like to give you a simplified picture of just a few issues that the legislature faces.

The Governor has proposed the elimination of certain business tax credits, essentially eliminating most Refundable Tax Credits. Under his plan the state would make $526 million available towards paying down the expected $1.6 billion shortfall.

Here is how it works:

Currently, if a business only owes $100,000 dollars in taxes and but has a tax credit of $200,000, that business will receive a check of $100,000 from the Louisiana Department of Revenue. If Refundable Tax Credits are eliminated, the state would credit the $100,000 that was due from taxes but the $100,000 over and above the tax liability would not result in a check being sent to the business.

The largest part of the $526 million savings would come from the Inventory Tax Credit—about $376 million. The Inventory Tax Credit is a broken system. Louisiana is one of only six states with an inventory tax and the way it’s implemented in our state is a crazy process that only the government could have created.

Here’s how this convoluted system works:
1. Each Parish Assessor does an evaluation of the inventory for each business in the Parish.
2. The business pays the assessment to the Parish Government.
3. The business then bills the State for the amount of the Assessment.
4. The State reimburses the business for paying their assessment.

So businesses do not actually pay the Inventory tax--the State does. This system puts the burden of paying the Inventory Tax on the State--with our tax dollars--with the only purpose being to funnel the money to Parish Governments.

In his budget, Governor Jindal has also recommended cuts of nearly half a billion dollars for State Government agencies. Department secretaries are concerned that these cuts go too far and threaten their ability to serve the people. Commissioner of Agriculture Mike Strain has expressed his concern that at the level of funding recommended by the Governor, he is worried that he will be unable to furnish the services to which citizens of this State are entitled.


There will be many twists and turns as we work toward a solution to produce a balanced budget and still protect higher education and healthcare.  I will keep you updated on a regular basis as to how we are proceeding in our endeavors.