BATON ROUGE, La. (AP) – Gov. Bobby Jindal said Thursday he's not putting any limits on what lawmakers should consider when debating a repeal of the state income tax, including requirements that they offset all or part of the lost revenue.
Jindal is pushing for a phase-out of the tax on both individuals and businesses, though his priority is the personal income tax. He's giving lawmakers little direction on how they should approach the discussion, after his proposal became so toxic that he ditched it.
“I'm not looking for barriers. I'm not looking to tell legislators, 'No, don't get rid of the income tax this way.' I'm looking to tell them, 'We want to get rid of the income tax. Help us find ways to do that,'” the Republican governor said in a meeting with reporters.
The personal and corporate income taxes are estimated to bring in $3 billion this year. A Legislative Fiscal Office analysis estimates a proposal by Rep. Hunter Greene, R-Baton Rouge, that would phase out the personal income tax over 10 years would reduce state revenue by $23.7 billion over the decade.
Jindal's not requiring the income tax repeal be replaced with new taxes to keep the state from losing money, though that was his initial proposal – and requirement – when he was pitching his own tax plan.
The governor had initially proposed to eliminate the income tax all at once in January 2014 and replace it with higher sales taxes charged on a list of previously untaxed services, along with the removal of dozens of tax breaks on the books.
The plan was so unpopular Jindal abandoned it on the opening day of the two-month legislative session earlier this week and instead threw his support behind the general concept of an income tax phase-out.
Lawmakers are grappling with whether they want to remove the tax, how they would do it and if they would replace lost tax revenue. The House Ways and Means Committee, the first stop for most of the tax bills, begins its income tax repeal discussion Monday.
Jindal's only direction to lawmakers: Don't raise more revenue than you'd remove with the income tax, or he'll veto it. But that's a nearly impossible premise, since lawmakers have struggled to come up with acceptable ways to offset the lost tax revenue.
“It's the first week of session. We don't want to put up any obstacles,” he said. He added, “At this point, my attitude's, 'Let a thousand flowers bloom.'”
The governor said the removal of income taxes would drive growth in the economy, through increased business development and increased personal wealth, and he suggested that economic growth could help provide some revenue to replace the income tax.
He also indicated lawmakers didn't need to look for a dollar-for-dollar swap with an income tax repeal at the level of growth forecasted for the tax, saying there's no requirement that government spending must increase in the future.
“Our first priority ought to be growing the private sector right now. We certainly shouldn't assume that 10 years from now that government should be a certain size just because that's how much today people think that revenues are going to grow,” Jindal said. “Nowhere is it etched in stone that government has to grow that much.”