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Alford: Capitol politics intensify ahead of 2023

The following is an article written by Jeremy Alford and published by the Greater Baton Rouge Business Report.  Jeremy Alford publishes LaPolitics Weekly, a newsletter on Louisiana politics, at LaPolitics.com Follow him on Twitter, or on Facebook. He can be reached at JJA@LaPolitics.com.

The ongoing election cycle and speculation about control of Congress kept most politicos in Louisiana busy and distracted this fall. But now attention spans are beginning to branch off, especially as the 2023 regular session comes into focus and state lawmakers launch their reelection bids ahead of next year.

Lobbyists, associations, local government officials and special interests are all beating paths to the doors of state legislators, who will be confined to only five general subject matter bills next year. Competition for those bills will be fierce.

Tax issues, meanwhile, will be plentiful, since the next session will be fiscal in nature. Lawmakers will be allowed to file as many of those kinds of proposals as they want, within certain limits.

Changes to our income taxes and the state sales tax rate will be debated. Lawmakers will likewise push—once again—concepts to centralize sales tax collections in Louisiana, which voters rejected when it was last sent to them in the form of a constitutional amendment.

When not attempting to write tax policy, lawmakers will also use the next regular session to guide the state’s hands on everything from investment portfolios to election practices. The session will likely host other debates including ones on insurance coverage and electricity regulations.

Next year’s session won’t be just another session. Lawmakers are up for reelection on the 2023 fall ballot, so the spring session will be among the last opportunities for the House and Senate memberships to impress voters.

According to Stephen Waguespack, president of the Louisiana Association of Business and Industry, the last session of a term is always heavily influenced by the upcoming elections. Moreover, all fiscal sessions are heavily influenced by the national and state economy. “Combined,” he adds, “this means the next session should be a spicy one.”

As long as revenue collections stay strong, Waguespack says we could see the Legislature continue investments in one-time expenses like infrastructure. There could be some “bold reforms” floated, like an education savings account, he says, and inflation will undoubtedly be discussed.

“Crime is out of control and must be addressed,” Waguespack adds. “I don’t see any way this session can end without some movement on this issue. We all know that any session before a big election has the potential to be more about sound bites and posturing rather than substance and policymaking. Hopefully this one can be the exception to the rule.”

There’s a growing appetite to get rid of the personal income tax, and Rep. Richard Nelson of Mandeville has been leading a review to figure out how to best accomplish that goal. The big challenge involves paying for the change.

Lawmakers are investigating similar avenues to tackle the temporary 0.45% portion of the state sales tax structure that expires in 2025. There’s even chatter about lawmakers removing the temporary portion of the state sales tax early so they can take credit during their reelection bids for (technically) cutting taxes.

While that’s all easier said than done, representatives and senators aren’t willing to shy away from their lofty ambitions quite yet.

Says Rep. Beau Beaullieu of Iberia Parish, who is vice chair of the tax-writing House Ways and Means Committee, “From the discussions that I am having with colleagues, you might see efforts to swing for the fences on the budget and revenue side of things.”

Compromises are always possible, Beaullieu says, even on high-profile items like eliminating the income tax.

“Are you able to cut expenses to that large of an extent in the general fund? Do you get rid of exemptions and credits to make it happen?” Beaullieu asks. “Good luck trying to get rid of the homestead exemption or move to a state property tax. Although it would be great to see it done in a single swoop, it’s more likely that we see a steady reduction of the income tax over a period of years. Legislation that eats the alligator one bite at a time has the best shot of passing.”

Lawmakers will get a shot to eat the alligator during their regular session that convenes in roughly four-and-a-half months, on April 10, 2023. The legislative primary election cycle, meanwhile, is less than a year away and is slated for Oct. 14, 2023.

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