The National Conference of State Legislatures ranked Louisiana No. 2 among states anticipating the largest percentage of decreased tax revenue for fiscal year 2010 which began in July. Angele Davis, Louisiana Commissioner of Administration told the Baton Rouge Press Club that in the next fiscal year Louisiana is facing a budget shortfall of $1 billion and in the fiscal year after that a shortfall close to $2 billion. This according to a published report in the Times Picayune of 11/10/09.
The study also pointed out Louisiana ranked first in the decline of personal income tax collections, second in the decline in sales tax revenue and fifth in decline of corporate income tax revenue. Governor Jindal tells the people Louisiana is doing so much better economically than the rest of the nation so how can the state rank so high in those three area's if the economy is doing so well in Louisiana?
There is another story told in a "point of view" editorial published in the Times Picayune on 11/26/09 of a recent nationwide study by the Washington DC based Institute on Taxation and Economic Policy. The study reported low and middle income families in Louisiana pay a far higher share of their income in state and local taxes than do the states richest families. The breakdown: Families making under $15,000 a year pay 10.4% of their incomes in state and local taxes; those making between $29,000 and $46,000 pay 9.9% and the richest 1% of households with average incomes just over $1 million pay 5.7% of their income. Another problem pointed out was that there is an array of tax exemptions in this years budget projected to cost $6.5 billion in lost revenue. That includes tax exemptions for the Oil and Gas Industry.
Governor Jindal, some members of his administration along with some state officials say the problem is a shortfall in state revenues caused by the decline in the national economy that is causing the states large deficits. But they can not have it both ways saying Louisiana is doing so much better than the rest of the nation and give out exemptions in the billions of dollars and try to justify that on the basis of stimulating the economy. Unemployment is going up in Louisiana, not down. The latest unemployment number at the end of October is 7.1%. At the end of October 2008 it was 5.3%. That is a sizeable increase in unemployment over last year this time.
State governments are just as bad as the federal government when it comes to taxation and revenues that is needed to service the needs of the people. In both, taxation is not fair and too much revenue is given up which does nothing to help make the economy stronger. One would have to be an idiot not to know that tax loopholes and exemptions favor the wealthy.
No one likes to pay taxes even though they are necessary but the burden should be shared by everyone. Anyone who thinks the exemptions and corporate welfare given to the Oil and Gas Industry over the last 40 years is good for the economy and has made the U.S. and states less dependent on foreign oil has been brain dead. Meanwhile their CEO's are laughing all the way to the bank.
The Jindal administration thinks they can cut the budget deficits that are projected and balance the budget by simply cutting every thing and leaving in place an unfair tax structure with special interest exemptions. That dog will never hunt. People need to keep in mind even when budgets are in balance that still does not mean taxation is fair. That is why true tax reform has to be made, if not the past will keep repeating itself. That says it all.
