Tax reform appears DOA

One of the last major tax reform packages of the session, one that overhauls the state’s tax code, likely is dead in the House after a core piece of Baton Rouge Republican Barry Ivey’s legislation was shot down Tuesday evening.
House Bill 360 , which needed the two-thirds approval for revenue measures, fell short, 58-31 vote. The bill proposed a flat corporate tax rate of 6.5 percent and removed the deductibility of federal income taxes from corporate tax filings in state.
HB360 was one in a slew of tax bills authored by Ivey. Substantive tax reform efforts have largely stalled this session, a fact that has become only more pointed as the June 8 session adjournment, potential fiscal shortfalls and the specter of special sessions loom.
Apparently sensing the outcome, Ivey admonished fellow legislators in frustration before the vote, criticizing their unwillingness to follow through on their initial promises of tax reform in the regular session.
“I’ll tell you this, I’m not coming back for a special session this year. I came to work this session. I came to solve our problems this session. I can’t make any more sacrifices to not solve a problem,” he said. “If we can’t do it now, we’re just not going to do it.”
Ivey, still rankled by the tenor of the floor debate, said afterward he doesn’t intend to bring HB360 back unless he’s sure it will pass and without it the remainder of his tax package will likely languish on the legislative calendar. Ivey said he doesn’t want to waste his time bringing legislation if his colleagues are unwilling to embrace change.
He also critiqued the House Republican delegation, noting a lack of leadership on tax reform has made it difficult to produce substantive change. Tax reform is a complex issue, he said, and legislators need to look to leadership for guidance.
House Appropriations chairman Cameron Henry, R-Metairie, told the Manships School News Service hesitancy in approaching tax issues isn’t limited to Republican legislators.
“Both Republicans and Democrats are very hesitant right now to move any tax bills without a crystal clear understanding of what the effects are going to be, and because the bills are so complicated sometimes it’s difficult to get that.”
Henry said Ivey’s bill could have benefitted from a more simplified explanation and personal lobbying to quiet legislators’ concerns over the measure’s complexity and questions over unresolved fiscal notes.
But he also noted that the Republican delegation could have done a better job in discussing tax reform measures prior their hitting the House floor for debate. Adding to the problem was that most bills received a flurry of changes just before floor debate.
Henry said legislators want to know they have exhausted the options before overhauling taxes, adding he doesn’t believe the House is there yet. Legislators could be in a better position between now and the inevitable special session, he said.
Ivey said even if a special session is called, he doubts much will happen. Representatives were given the time and tools necessary to get the job done during the current regular session, and if they can’t resolve fiscal issues now it will be nearly impossible when they are strapped for time during the special session.
Ivey predicted the state’s higher education and health care systems will be devastated by funding cuts.
How they voted
Republicans For (26): Abraham, Amedée, Bacala, Barras, Berthelot, Bishop, Broadwater, S. Carter, Chaney, Davis, DeVillier, Dwight, Foil, Guinn, L. Harris, Havard, Hazel, Henry, Hilferty, Hoffmann, Huval, Ivey, Leopold, Schexnayder, Stagni, Talbot
Republicans Against (26): Bagley, Carmody, Coussan, Crews, Edmonds, Emerson, Falconer, Garofalo, Hensgens, Hodges, Horton, Howard, N. Landry, Mack, Magee, Miguez, Jay Morris, Jim Morris, Pearson, Pope, Schroder, Seabaugh, Simon, Stefanski, Thomas, Zeringue
Democrats For (30): Abramson, Anders, Billiot, C. Brown, G. Carter, Cox, Danahay, Franklin, Gisclair, Glover, Hall, Hill, Hunter, Jackson, James, Jefferson, Johnson, Jones, Jordan, T. Landry, Leger, Lyons, Marcelle, D. Miller, Moreno, Norton, Pierre, Reynolds, Smith, White
Democrats Against (4): Armes, Bagneris, R. Carter, LeBas
Independents For (2): Marino, Richard
Independents Against (1): T. Brown
Absent (16): Bouie, Carpenter, Connick, Cromer, Gaines, J. Harris, Hollis, Jenkins, McFarland, G. Miller, Price, Pugh, Pylant, Shadoin, Stokes, Thibaut