It shouldn’t surprise you to hear that Louisiana’s so-called “revenue problem” isn’t really a problem at all. Indeed, Louisiana’s real “problem” lies in our state government’s overspending, and that issue is exacerbated by its convoluted local government system.
So, how do we solve the core problems with Louisiana’s local government system and ensure it encourages rather than discourages the availability of quality jobs and economic opportunity in our state? Glad you asked! Today, the Pelican Institute lays out the solutions with the release of the next in its series of deep-dive policy papers comprising A Jobs and Opportunity Agenda for Louisiana.
In the newly released solutions overview, the Pelican Institute spotlights the dysfunctional relationship between our local and state governments, detailing how each infringes on the autonomy of the other and how all of these issues inhibit the growth of jobs and opportunity in Louisiana. For example, local governments spend much time and energy collecting revenues for the state, which is something that can be more efficiently accomplished at the state level. At the same time, state-imposed restrictions limit the powers of local governments to manage the revenue they collect.
Throughout the paper, the Pelican Institute addresses these and other systemic problems impacting the local government in Louisiana. Key issues highlighted in the paper include solutions for reforming the fiscal structures of local government, increasing local government autonomy and amending local sales and other tax structures.
It all ties into rebalancing the power structures at play and empowering local residents with more control over local taxation and spending, rather than having lawmakers in Baton Rouge make those decisions for them. We can enhance the Louisiana government’s accountability to voters and afford parish residents the freedom and flexibility to choose the level of taxes and services they wish to see in their area.
Essentially, this new system would also allow parishes to compete to offer the most pro-growth environment for business, bringing jobs and opportunity to their communities, rather than the status quo that requires parishes to compete for the most funding from the state government.
Some of the specific solutions the Pelican Institute offers to enact positive change for local governments in Louisiana include:
• Eliminate the constitutional provisions on supplemental pay, giving parishes the freedom to increase fire and police salaries and services without burdening the state government with the cost of raises.
• Repeal the $90 million revenue sharing fund, which is a subsidy for local government.
• Repeal the refundable inventory tax credit, and start the process for repealing parishes’ authority to assess inventory taxes.
• Reform provisions that automatically adjust millage rates following a re-assessment of property values.
• Repeal the requirement for legislative approval of a local tax referendum.
• Reduce overall sales tax rates by at least one percentage point, to 3.45%, and ideally as low as 3%.
• Apply legislative expansion of the state sales tax base to parishes as well, creating a uniform tax base throughout Louisiana and allowing parishes to lower their sales tax rates.
• Create a single system of state and local sales tax collection and auditing, which would reduce administrative costs for government and businesses.
You can read the full deep dive and see all of the recommended solutions to the problems with local government in Louisiana by clicking here. And, for a shorter summary of the problems and the solutions, read our two-page outline.
Stay up-to-date with the Pelican Institute over the next several months, as we release further deep dives into the major barriers to jobs and opportunity in Louisiana. Share our solutions with your friends, family, neighbors and legislators, and tell them to join you in supporting our efforts to bring jobs and opportunity back to Louisiana.