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Wednesday, November 10, 2004 |
State may face budget hole
Legislator looks at alcohol tax increase
Wednesday, November 10, 2004
By Ed Anderson
Capital bureau, Times Picayune
BATON ROUGE -- Gov. Kathleen Blanco should start
discussing with lawmakers and others as soon as possible what kind
of taxes or other revenue measures she may be considering to deal
with a projected $582 million budget hole in the next fiscal year,
the chairman of the House's main tax committee said Tuesday.
Rep. Bryant Hammett, D-Ferriday, an administration
floor leader and chairman of the House Ways and Means Committee,
told reporters he is unaware of a game plan being discussed for the
legislative session that begins April 25.
"There has been no discussion of tax increases that I am aware of"
or any other means to fill the projected budget shortfall, Hammett
said.
Blanco's chief fiscal adviser, Commissioner of
Administration Jerry Luke LeBlanc, could not be reached for comment.
Blanco press secretary Denise Bottcher would not say what, if
anything, is being considered.
Hammett said that with the state facing a
shortfall, Blanco's office should be talking about various revenue
options and scenarios. "It should be a well-discussed program and a
well-thought-out program," he said. "It should be discussed sooner
rather than later."
Hammett's comments came after a meeting of his
committee to look into studies of a possible increase in the state
taxes on beer, wine and liquor and to receive a report on the
effects of the "Stelly Plan," a tax swap that phased out the state's
4-cent sales tax on some food and residential utility bills in favor
of increased income taxes for higher-wage earners.
Several lawmakers have complained that the plan,
approved by voters in 2002, has put a bigger tax bite on some
constituents than expected. They have promised to abolish or modify
the program at the 2005 session.
Legislative Fiscal Office chief economist Greg
Albrecht told the panel that based on figures from the 2002-03
fiscal year, state income taxes attributed to the tax swap were up
$32 million and sales taxes were down by $51.9 million, for a net
loss that year of $19.9 million.
In the fiscal year that ended June 30, the tax
swap created a $12.5 million net gain in taxes, he said.
While the plan was designed to initially be
revenue-neutral, Albrecht said, the tax will grow as income in
Louisiana increases.
In a written report to the panel, Albrecht said
that "it is still too early to obtain detailed tax return data" on
the plan since it has been in place for only two years.
"I hope we don't make any changes (in the plan)
until we know what the present changes did," Hammett said. "I am
sure there will be attempts to modify this (at the session). I think
it is too early to start revising Stelly. . . . I think we ought to
give it a chance to work," possibly for another two years.
Rep. Rick Gallot, D-Grambling, asked the panel to
look at a possible increase in the tax on beer, which has not
changed since 1948; wines, which have remained unchanged since 1956;
and liquor, which has been the same since 1970.
"This is no temperance measure from Rick Gallot,"
the lawmaker said. He said he wants to see how the state's alcohol
taxes compare with those of other states in the area.
State revenue department data shows the state
imposes a tax of $2.50 per gallon on alcohol, the same as Arkansas
and Mississippi and 10 cents lower than Texas. It also shows the
state imposes a tax of 32 cents a gallon on beer, compared with 19
cents gallon in Texas, 23 cents a gallon in Arkansas and 43 cents a
gallon in Mississippi. All taxes are imposed on liquor wholesalers.
The beer tax amounts to $10 on each barrel of beer.
Gallot would not say whether he would file
legislation to hike the tax on beer, wine and liquor. "There is more
information we need to gather; I won't rule it in and I won't rule
it out," he said.
Beer Industry of Louisiana lobbyist George Brown
told the panel that the number of liquor wholesalers in the state is
down and alcohol consumption also has been declining. "I don't feel
bad at all that the beer tax has not increased since 1948," Brown
said. "The blow we took in 1948 is a blow from which we have not yet
recovered."
Chris Young, a New Orleans lawyer and lobbyist for
the alcoholic beverage outlets, said that besides the $10-a-barrel
tax the state imposes on beer, parishes impose another $1.50 on beer
and alcohol.
When all federal, state and local taxes are
factored in, Young said, "67 percent of the cost of a rot-gut bottle
of vodka is taxes."
. . . . . . .
Ed Anderson can be reached at
eanderson@timespicayune.com
or (225) 342-5810.
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