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After voters spat out their attempt to overhaul the article of the Constitution that governs revenue and finance through a single amendment, lawmakers are working to break up a similar rewrite into more bite-sized chunks.
Friday was the deadline to prefile constitutional amendment proposals, so legislators and staff were working through the details as this column was being compiled.
Some of the bills that members are working on may be essentially placeholders destined for numerous amendments. There was no Plan B for tax reform, so members are trying to create one on the fly.
House Ways and Means Chair Julie Emerson says several people who opposed Amendment 2 have reached out to her to say there were a lot of elements that they liked, but voted “no” because they had concerns about one or two things.
“I’m not trying to bring it back in the exact same form,” she says. “I think we need to listen to some of the feedback and have a few different items and instruments that we can talk through and debate more on a granular level.”
Lawmakers still need to find a recurring revenue source for teacher pay raises, House Appropriations Chair Jack McFarland says, naming another piece of the Amendment 2 package.
“I think it is inevitable that some of these things come back up in the fiscal session,” he says.
But in the upper chamber, where Emerson’s bill creating Amendment 2 passed unanimously, there seems to be less appetite for more big swings. Senate Revenue and Fiscal Affairs Chair Franklin Foil says he wasn’t aware of any “big plans” in the works in response to the amendment’s failure.
With so little time between the election and the session, “we always knew that there would not be a whole lot of time to do something different if the amendment failed,” Foil says.
While folks in the executive and legislative branches would love to reduce tax rates further, especially in light of Mississippi lawmakers moving to phase out their income tax, Foil says more cuts probably are off the table for this session.
While there certainly will be cleanup legislation related to the other items lawmakers passed during the November tax session, “I think to make the big changes, we’re just going to have to give it a little bit of time to play out,” Foil adds.
Sen. Jeremy Stine says many voters are suspicious of off-year, low-turnout elections, fearing that state government is trying to slip something by them. He says he was considering filing legislation that would require constitutional amendments to run only on ballots featuring statewide or federal offices.
As for how the Legislature should respond to the Amendment 2 failure, Stine suggests a “cooling off period” might be a better way to go, rather than trying major tax reform again this year.
Pollster and consultant John Couvillon says breaking up the package into smaller pieces, so that it’s easier to convey what each one does, could be a smart strategy. The ballot language addressed six different topics, he says, plus the now-infamous kicker: “and make other modifications.” Many voters were no doubt asking themselves: What might those “other modifications” be?
“That kind of vagueness and uncertainty is a big turnoff for voters,” he says.
Couvillon says voters prefer to pick and choose what they’re comfortable with or not. Asking them to sign off on a single omnibus amendment that packs in more than 100 pages of legislation is asking quite a lot, he says.
It’s also worth noting that other amendments on the ballot, particularly Amendment 3, which would have allowed lawmakers to add more crimes to the list of offenses for which minors can be tried as an adult without amending the constitution, drove much of the turnout behind the movement to reject all four amendments.
But going back out with amendments this year would risk further voter fatigue, and would require spending that isn’t currently budgeted.
On the spending side, the biggest question relates to teacher pay. The amendment sought to lock in a stipend teachers and support workers have been receiving, and Gov. Jeff Landry’s executive budget doesn’t include the almost $200 million needed for another round of stipends. Without legislative action, Louisiana teachers would take a pay cut.
The Revenue Estimating Conference has projected a $194 million shortfall for the next fiscal year, which the governor’s budget accounts for, McFarland notes.
“Do we fund the teacher stipend?” he says. “In order to do that, you’re going to have to make reductions in the budget. So now, it’s a matter of us sitting down and prioritizing what’s important in the budget.”
A standalone item that, like Amendment 2, called for dissolving three education trust funds and using that money for teacher pay, is likely to be debated this year. Also on the front burner is the inventory tax, says tax consultant Jason DeCuir, who often works with state lawmakers. DeCuir says lawmakers are exploring ways to delay the sunset of the inventory tax credit, and instead phase it out over a longer time frame.
Separately, lawmakers are discussing phasing out the tax itself, possibly over 10 years, which would make business advocates happy. That would require a constitutional amendment, and politically would require local buy-in.
Amendment 2 would have allowed parishes to opt out of collecting the inventory tax. Drawing from dollars that would have been freed up by merging two state trust funds (another amendment provision), state officials planned to incentivize local leaders to give up the tax.
The plan was to sunset the state tax credit for corporations that pay the tax in 2026, which already made the business lobby nervous. As things stand now, companies stand to lose the credit without even a chance of avoiding the inventory tax.
As a side note, the Revenue Stabilization Fund the Legislature created in 2016 would have gone away if Amendment 2 had passed. Last year, lawmakers diverted more than $700 million that otherwise would have gone to the fund for one-time expenses; a similar maneuver may be tried this year to free up general-fund dollars.
