The next 11 months – quite possibly the next seven weeks – are a critical time for tax policy in Louisiana, when major decisions will be made about how we finance our collective future. The choices made by Gov. Jeff Landry and the Legislature will shape the quality of our schools, roads, hospitals and safety net; and our ability to make new investments in education, infrastructure and community resilience that would help our economy grow and prosper.
We need your voice in this process.
Louisiana faces a “fiscal cliff” in 2025, when a 0.45% state sales tax and a smaller sales tax on business utilities roll off the books. These expiring taxes are the main reason why public colleges and universities have already been told to brace for up to $250 million in cuts next year. Other areas of the budget, including health care and funding for public schools, are also vulnerable to cuts.
Let’s be clear about two things:
- The Legislature can – and should – address the fiscal cliff without making cuts to important programs.
- We do not need a rushed constitutional convention in order to address the fiscal cliff.
This week we learned that the push to rewrite Louisiana’s constitution might not be dead, even though the state Senate nixed the idea in the spring. On Tuesday, legislators got an email from Republican megadonor Lane Grigsby that included a proposed draft of a new constitution and urged them to craft a new foundational charter by Aug. 23. (coverage here and here).
(Reminder: the last constitutional convention lasted an entire year, and before that voters had a chance to elect delegates).
As the draft document makes clear, a constitutional convention could potentially do away with the homestead exemption for property taxes, and allow the state to apply sales taxes to groceries, medicines and home utilities. It could upend the protections for civil servants, the funding formula for public schools and state support for local police and firefighters.
This was a terrible idea last spring, and it’s still a bad idea. The public agrees. A poll by The Times-Picayune found that only 1% of voters think a constitutional rewrite should be one of the governor’s top goals. Another poll, by Global Strategy Group, found that an overwhelming majority of voters don’t want a process that’s rushed, and that the public must have more input than they’ve been offered so far.
Grigsby released the document, not coincidentally, in the same week that the tax committees in the House and Senate are scheduled to hear testimony from Revenue Secretary Richard Nelson about the proposed changes to Article VII of the constitution (which governs tax and budget policy). The hearing is scheduled for Thursday at 1 p.m.
To be sure, Louisiana’s constitution is far from perfect. It’s too cluttered with minutiae and in need of reform. But this process is far too important to be rushed, and it needs input from all Louisianans – not just those who are rich and powerful enough to bend the governor’s ear.
Here’s what you can do:
- Monitor (or attend in person) Thursday’s hearing of the House Ways & Means | Senate Revenue and Fiscal Affairs Committee;
- Contact your legislators to let them know what you think about a proposed constitutional convention.
- Stay tuned for more information from Invest in Louisiana. In the coming weeks and months, we’ll be releasing detailed information about the fiscal cliff, and recommendations for how Louisiana can overcome these fiscal challenges and build an economy that works for everyone.
In the meantime, you can read more about the proposed constitutional convention on our website.