Legislature 2021

Tax reform amendment falls short of needed 70 votes in House

Photo by Robert Buckman

In a stunning development, the proposed constitutional amendment to eliminate the federal income tax deduction from state personal income taxes fell five votes short in the House of Representatives Wednesday evening.

HB274 by Rep. Stuart Bishop, R-Lafayette, received 65 yea votes and 26 nay votes, but a constitutional amendment requires 70 votes in the House, or two thirds of the full 105 membership. Rep. Dewith Carrier, R-Oakdale, later went from “absent” to vote for it, making the final tally 66-26, still four short.

Ironically, just moments before, the House had approved, 70-24, Bishop’s companion bill, HB278, which would have compensated for the elimination of the federal deduction by reducing the rates in three brackets of the personal income tax.

A crucial 13 members were not recorded voting on the constitutional amendment, including Rep. Julie Emerson, R-Carencro, who was absent Wednesday, and Rep. Vincent Pierre, D-Lafayette, who was present and had voted on other bills shortly before.

On Thursday, Bishop returned HB274 to the calendar for a reconsideration vote, which has not yet been scheduled. Bishop will spend the time counting noses among the 13 members who did not vote on it.

Lafayette Parish’s other Republican representatives, Beau Beaullieu, Jean-Paul Coussan and Jonathan Goudeau, joined Bishop in voting for both bills. Rep. Marcus Bryant, a Democrat whose District 96 overlaps Iberia and Lafayette parishes, voted against both.

Bishop may have alienated some members when he lost his patience over repeated questions about the constitutional amendment from the back mic.

“I’ve returned this to the calendar and returned it to the calendar again over the past month,” Bishop snapped. “Everybody in this body knows how he’s going to vote. Everybody knows what’s in it.” He then told Speaker Clay Schexnayder he would take no more questions and called for the vote—which he then lost.

HB274 would have removed excess federal income tax deduction for the state personal income tax but retain it for the corporate income tax. It also would have removed the cap on rates and brackets on personal income tax established by law in 2003 and would allow the Legislature to establish the new rates and brackets by law rather than by constitutional amendment.

HB278 would have lowered the rates to be paid by individuals for the first $12,500 of net income (after credits) from 2% to 1.85%; on the next $37,500 of net income from 4% to 3.5%; and on any amount over $50,000 from 6% to 4.25%.  

It also would have allowed 100% of medical expenses claimed on federal income tax returns to be deductible from the state income tax.

Residents who itemize their federal deductions would have seen their state income tax go up somewhat, while those who take the standard deduction would have enjoyed a modest decrease, according to the bill’s digest.

 “It’s revenue-neutral and almost to the point of being revenue-positive,” Bishop told the House, “but it will save taxpayers money. It hurts the higher taxpayer more than it hurts anybody.”

Gov. John Bel Edwards has threatened to veto any tax reform bill that is not revenue-neutral.

Constitutional amendments require a two-thirds vote in each house and approval by the voters. This amendment, if it had passed, would have appeared on the ballot of the next federal election on Nov. 8, 2022. 

According to the Legislative Fiscal Office, SB278 would raise an additional $2.6 million in revenue in the 2022-23 fiscal year and $18 million over five years. 

The amendment and the enabling bill were reported favorably by the Ways and Means Committee, which Bishop chairs, by a 14-0 vote on April 19. Floor debate on the bill had been delayed twice and on the constitutional amendment once.