Louisiana Senators have shelved a proposal to lower income and sales taxes. The House-approved bills stalled after a report revealed that the tax cuts would result in a 142-million-dollar shortfall in fiscal year 2027 and 590 million in 2028. Invest in Louisiana Executive Director Jan Moller says the Senate Revenue & Fiscal Affairs Committee was wise to put the brakes on these tax cuts, since the state income tax was just lowered at the beginning of the year.
“And we still haven’t seen the full effect of how those tax cuts will affect our ability to raise enough money to pay for public schools and hospitals,” Moeller said.
The bills looked to cut the state sales tax from six percent to 5.75 percent and the individual income tax from three percent to 2.75 percent. The tax cut plan also sought to double the standard deduction for senior citizens. Moller says legislators always want to cut taxes, but they also have to pass a balanced budget every year.
“They don’t have the luxury that Washington does of running budget deficits and paying for things and sending the bill to the next generations. So, when you cut taxes by this much, it means you’re going to have to cut what you spend on programs that support families and communities.”
On another note, the budget lawmakers are getting ready to approve is not a perfect spending plan, according to Moeller, but lawmakers are spending the available dollars they have wisely.
“We’re not necessarily making the kind of new investments that we need, but in a balanced budget environment, you do the best with what you have, and I think the Senate did that.”
The Louisiana Senate is expected to approve its version of the budget later this week.
