On the opening day of the legislative session, Gov. Bobby Jindal officially shelved his plan to eliminate income taxes and raise sales taxes.
Gov. Bobby Jindal told lawmakers Monday that he's shelving his tax swap proposal, rather than risk an embarrassing defeat of a restructuring plan that drew ire across the political spectrum and from business leaders.
But the Republican governor isn't giving up on his push to eliminate Louisiana's income taxes on individuals and businesses.
As the annual legislative session began, Jindal asked lawmakers who were skeptical of his idea to instead come up with their own plan to get rid of the state income tax.
"I am now going to park my tax plan," Jindal said in prepared remarks released by the governor's office ahead of the speech. "Now, to be clear, I still like my plan, but I recognize that success requires give and take. And I recognize that in this instance I need to be the one who gives so that we can have the chance to achieve success.
"Let's work together to pass a bill this session to get rid of our state income tax," the governor told a joint meeting of the House and Senate.
He didn't offer parameters for what should be included, or whether the removal of $3 billion in income tax revenue would need to be offset with some other tax hike to gain his support.
Several lawmakers have offered proposals to gradually phase-out the income tax over a decade, and various proposals have been filed to remove tax breaks, raise tobacco taxes and generate other kinds of tax revenue. Jindal didn't spell out which ones he'd support.
Jindal had proposed to get rid of the income tax immediately, saying states attract more people and business development without the taxes. In exchange, he proposed increased sales taxes charged on more items, boosted tobacco taxes and removal of some tax breaks.
But that tax swap package encountered widespread and bipartisan opposition, criticized by religious leaders, the state's leading business lobbying group and the governor's own hired economic consultants.
Concerns centered on the size of the sales tax increase and a proposal to charge the tax on services, like haircuts, car repairs, sports tickets, park visits and the services charged from one business to another.
The sales tax hike would have made Louisiana's average combined local and state sales tax rate the highest in the nation, generating concerns about its impact on the poor. The proposal also was estimated to shift $500 million in tax costs from individuals to businesses, raising concerns it could harm business.
Republicans and Democrats said they didn't believe Jindal had enough support to pass the package, with some pronouncing it dead before the legislative session even began.
"Here is what I've heard from you - and from the people of Louisiana: 'Yes, we do want to get rid of the income tax, but, governor, you're moving too fast, and we aren't sure that your plan is the best way to do it.' ... OK, I hear you," Jindal said.
The IND reported last week that it was 86'd.