The Senate wasted little time Thursday morning, the last day of the session, to approve the conference committee report hammered together by House and Senate members the day before on the constitutional amendment transforming the state income tax. It will appear before voters this fall.
The vote on SB159 by Sen. Bret Allain, R-Franklin, was 34-3. The House approved the conference report the previous afternoon, 95-6.
“The concept is a good one. We need to reduce taxes,” Sen. Karen Carter Peterson, D-New Orleans, said before the vote. “But it shouldn’t be in the constitution. It should be statutory. We don’t want to go back to the people every time we have to adjust it. I don’t think this is smart public policy.”
Allain countered that with the cap of 4.75%. “We do have some head room before we have to go back to the people. This is their assurance that their taxes won’t go above a certain amount,” he said.
Joining Peterson in voting “nay” were conservative Republican Sens. Eddie Lampert of Gonzales and Jay Morris of West Monroe.
“It isn’t every day you see Sen. Morris and Sen. Peterson voting alike on a bill,” quipped Allain.
The conferees agreed to a House amendment that lowered the maximum tax rate from 5% to 4.75% but rejected the House’s wording setting the date for the amendment to go before the voters on Nov. 8, 2022. It will now be on the ballot on Oct. 9 of this year.
The current constitutional cap is 6%, which was ratified in 2003.
The most controversial element of the proposed amendment is that is removes the federal income tax deduction from the state income tax and authorizes the Legislature to establish a new system.
Moments earlier, the Senate agreed to the conference report on the amendment’s enabling bill, HB278 by Rep. Stuart Bishop, R-Lafayette, which establishes that new system. The House approved the conference report on Wednesday, 98-4.
Bishop’s bill, which cannot take effect unless voters ratify the constitutional amendment this fall, lowers the percentage collected on the first $12,500 of income from 2% to 1.85%; on the next $37,500 from 4% to 3.5% and in excess of $50,000 from 6% to 4.25%.