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Story Archives: Solons favor 'Stelly' repeal; oppose eliminating income tax


Solons favor 'Stelly' repeal; oppose eliminating income tax
by Michael DeVault - posted Wednesday, April 30th, 2008 @ 9:59 pmE-mail Story E-mail Story | Print Story Print Story 
A proposal to roll back state income tax rates hit a snag late Tuesday, when a senator amended the bill to eliminate all state income taxes.

State Sen. Mike Walsworth said he believed the move was aimed at killing Senate Bill 87, which would repeal the "Stelly Tax" and return tax rates to their pre-2002 levels.

"I have no problem looking at cutting state income taxes, but we should be responsible enough to look at how we're going to pay for those," said Walsworth, who voted against the amendment that called for eliminating all state income taxes.

The amendment passed the Senate by the narrowest of margins, with 19 senators voting in favor of the amended bill and 18 voting against it.

State Sen. Buddy Shaw, R-Shreveport, proposed a repeal of the 2002 increase in Louisiana state income taxes.

Rolling back tax rates to 2002 levels would cost the state some $302 million per year in revenues. However, that price tag rose significantly after State Sen. Nick Gautreaux tacked on an amendment that would eliminate all state income tax collections over the next 10 years.

That means the state could face a $4 billion per year revenue shortfall by 2018.

Walsworth said he wanted to see income tax rates cut and would entertain a future elimination of the tax, but he said Shaw's bill was not intended to repeal all income taxes.

"I would like to go towards that one day, but yesterday was about Stelly, either for or against the Stelly plan, and that's what I voted on," Walsworth said.

The amended version of the Shaw bill, including Gautreaux's amendment was unanimously passed by the Senate and now moves to the House of Representatives for consideration.

State Rep. Kay Kellogg Katz said she was "conflicted" about the bill because she desired to cut taxes but at the same time understood the need to provide essential services to Louisiana residents.

"I'm certainly going to vote for the Stelly repeal," said Katz, R-Monroe. "But I'm concerned about the repercussions of eliminating all income taxes."

Katz said the state would have to absorb some $4 billion in budget cuts to pay for Gautreaux's amendment, and that could mean cuts to services like health care, education and infrastructure.

Katz also said she always favors trimming taxes and would entertain eliminating the state income tax if it could be made revenue neutral, meaning it would not cost the state essential revenue dollars.

"I think that we'll stimulate the economy and in essence we'll make more," Katz said.
Before that can happen, though, Katz said lawmakers need to do everything they can to ensure continued funding for programs that service the elderly and the poor.

"We have so many things we just have to do," Katz said.
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