Eliminating income taxes would be an expensive giveaway

At least a dozen states are considering proposals to eliminate personal and corporate income taxes. Unsurprisingly, supporters of these schemes have offered few details about how they would replace the massive amount of revenue these taxes generate. The Institute on Taxation and Economic Policy’s Aidan Davis and Center on Budget and Policy Priorities’ Wesley Tharpe, in a guest column for Governing, lay out the many pitfalls of eliminating income taxes: 

The idea that states can eliminate income taxes without eventually enduring devastating cuts to schools and vital services is a fantasy. And the inevitable shift from income taxes to more regressive sales taxes and fees would hit regular workers and families the hardest, while showering the wealthy with additional riches. Income tax elimination is framed as tax cuts for everyone, but in truth it’s just a shift that benefits wealthy households and big, oftentimes out-of-state corporations at the expense of the rest of us. Lawmakers should focus on policies that help everyone, not just the rich and powerful.

Louisiana could be next, as Gov. Jeff Landry has spoken in favor of phasing out Louisiana’s income tax, which generates nearly $5 billion a year. But supporters have been silent on how they would make up for the massive revenue loss that would result.

Tax cuts for polluters
At least 14 Louisiana plastics manufacturing plants have received lucrative state tax breaks while polluting nearby communities of color, according to a new report from the Environmental Integrity Project. Most of the facilities violated federal pollution permits and failed to meet hiring goals to comply with the state’s Industrial Tax Exemption Program. The Times Picayune | Baton Rouge Advocate’s Mark Schleifstein reports:

“In Louisiana, there’s an environmental justice component,” [Environmental Integrity Project research manager Alexandra Shaykevich] said. “According to our analysis, close to 600,000 people live within three miles of these plants and about two-thirds of them, 66%, are communities of color. That number gets a lot higher in certain places, including in Louisiana, where you are seeing some that are 95, 90% communities of color,” including along the Mississippi River between Baton Rouge and New Orleans. 

The report cites multiple violations by Thailand-based Indorama’s plants in Westlake to show how companies continue to receive tax breaks despite damaging the communities they’re supposed to support. 

“But instead of cracking down or penalizing the plant, the state agency approved changes to Indorama’s pollution control permit four times between 2018 and 2023 that allowed the plant to release more air pollution – including a tripling of its permitted volatile organic compounds emissions,” the report said. … But the report pointed out that the violations, even when confirmed by federal or state agencies, have not resulted in actions to either refund the tax breaks or prohibit companies from receiving future incentives.

Gov. Jeff Landry recently eliminated the requirement that companies must create or retain jobs as a condition of receiving property tax forgiveness through the state’s Industrial Tax Exemption Program. 

Louisiana policies don’t support population gain

Louisiana lost 84,000 people – more than the population of Lake Charles – between 2020 and 2023, according to the U.S. Census Bureau. The outmigration wasn’t confined to rural areas or regions recovering from recent hurricanes, with only eight of the state’s 64 parishes experiencing population gains. The Times Picayune | Baton Rouge Advocate’s Jeff Adelson explains how Louisiana’s population loss is being driven by long-term problems, like failing to adequately invest in education:

“Our recent policies are not supporting population gain,” [Data Center chief demographer Allison Plyer] said. …  And in terms of migration, Plyer said the main factors that draw people to a state are lacking in Louisiana. Studies have shown an educated workforce is key to driving population growth, but state funding for higher education has fallen by a third on a per-student basis since 2008, she said. And there’s been essentially no job growth in the state since 2015, she noted.

Extreme weather endangers crawfish season

The record drought that parched Louisiana last summer decimated the state’s crawfish population, causing significant price hikes for the popular crustacean. The damage to the state’s crawfish industry was serious enough for Gov. Jeff Landry to issue a disaster declaration to secure federal aid. The New York Times’ Rick Rojas, reporting from Abbeville, explains the extreme weather and cost increases that crawfish farmers have dealt with: 

“We know that drought can affect crawfish, but we didn’t know the extent of it,” said Mark Shirley, a longtime crawfish specialist at the Louisiana State University AgCenter. Farmers “spent three or four times as much on fuel and time pumping water,” he added. “The water was evaporating almost as fast as they were pumping it into the field.”

Rojas spoke to Adlar Stelly, who broke down the significant decline in crawfish numbers at his dock that sorts and delivers to other states: 

The numbers have been alarming: In December, just 1,281 pounds of crawfish moved through the dock. That month the year before, it had been 78,000. In January, it took in roughly 4,340 pounds, compared with 158,000 the year before.

While climate change is an immediate and existential threat to Louisiana, it’s also a partisan issue. Landry, who requested federal aid to help deal with the effects of a historic drought, has called climate change a hoax. Rojas captures the dynamic of a deep red state that’s on the front lines of a changing climate. 

The torturous summer was widely attributed to an El Niño weather pattern. And although some in the crawfish industry were reluctant to blame climate change, in a state that has been bombarded by powerful hurricanes, ice storms, wildfires and an ocean voraciously chewing away its coastline, here was yet another vivid display of nature’s volatility. “Mother Nature has everything to do with it,” said Barry Toups, who has a crawfish farm in Vermilion Parish.

Number of the Day

41.3% – Percentage of Louisianans that get a minimum of 150 minutes of exercise a week recommended by the the Centers for Disease Control and Prevention. The Pelican State’s percentage was the second-lowest in the nation, only behind Mississippi. (Source: Brigham and Women’s Hospital via Axios New Orleans)