Sales, income tax issues face legislature
By James Ronald Skains
"At this point, we have a lot of questions about what issues the 2013 Legislative session will actually be dealing with," State Representative Jim Fannin told the Piney Woods Journal.
"We do know that we will be facing a $1.3 billion deficit but as of yet we don't know how the Jindal Administration plans to handle this big deficit," added Fannin, who is the Chairman of the House Appropriations Committee. "We are hearing through the media that the Governor is thinking of a way to eliminate the state income tax."
"That sounds great, but some other tax revenue will have to take its place," Fannin continued. Fannin was elected to represent District 13 in North Central Louisiana in a special election in 2003 when Rodney Alexander, then District 13 State Representative was elected to Congress.
"At this time, the idea to eliminate the State Income Tax is just a concept that must be thoroughly developed," Fannin explained.
"Right now, personal income tax accounts for only 26% of the total revenue source for the State," Fannin pointed out. "Sales tax currently accounts for about 25% of the tax revenue coming into the state coffers. So, to replace one source of tax revenue with another is very complicated," said Fannin, a former member of the Jackson Parish Police Jury. "There are a lot of sales tax exemptions in place now that could not be taken away without hurting a lot of people. For instance, state sales tax is exempt on part of the equipment used by people in the logging industry. Other instances are the partial exemptions on purchases of new equipment for manufacturing plants."
"We have to be very careful in locking in a comprehensive sales tax program in exchange for eliminating the state income tax," Fannin added. "If a sales tax was all encompassing without exemptions, you would theoretically have to pay sales tax even on things you grow in your garden."
"I will be getting a copy of the Administration's budget within the next few days, and then I will begin to develop an idea of what the main focus of this session will be," Fannin said. "It will take a couple of weeks for my staff to go through it and get a handle on what the Administration is wanting to do."
"Also, I haven't been hearing of a lot of other major issues for the session being discussed," Fannin noted. "In early March, we will begin to see bills filed to address certain issue that are important to individual Representatives and Senators."
"Another problem the state is facing is that our capital outlays have reached constitutional limits which means we can't sell more bonds to even finance the rural road program," said Fannin, a 1967 graduate of Winnfield High School. "I'm for the state to call in some of the high price bonds that we have out there, and refinance them at lower interest rates. That way we can sell the bonds for the Rural Road program. The cost of the Rural Road program was going to be paid for with half cash and the other half from proceeds of the bond sales."
"We have moved forward with the Rural Road program on the cash portion but can't move on the other half until the bonds are sold," Fannin explained. "I've recently had meetings with the State Treasurer John Kennedy to express my opinion of what we should do with the bond situation."
The Journal asked Representative Fannin about the numerous tax credits extended to various industries around the state, and their effectiveness.
"There are a lot of tax credits on the books that need to looked at seriously to see if they are producing more revenue for us than they are costing us," Fannin replied. "I think that some of the tax credits could probably sunset and let them expire. Other tax credits to industry may need to be re-worked and caps put on them," Fannin elaborated. "One set of tax credits that I know that isn't working to the benefit of the State, are the Film Tax Credits."
"According to data furnished by the State, we spend $7 to get back only $1 which is definitely not a fair deal for the State," Fannin emphasized. "I would like to see some changes made there."
"In a meeting last week with the Governor, he was telling us that the unemployment rate in Louisiana is about 2 percentage points below the national average," said Fannin, an owner operator of a Feed and Seed Store in Weston. "If that is true, then our unemployment rate is about 5.9%. I don't know if that include people who have stopped looking for jobs."
Another question by the Journal for Representative Fannin was: "The price of oil has been around $90-$95 per barrel for more than a year. Why is there such a projected shortfall in the State budget this year?"
"Well, first thing that you have to keep in mind is that only 14% of the state tax revenue comes from oil," Fannin explained. "Secondly, for the past year, the State Revenue Estimating Committee has pegged their revenue forecast on $101 a barrel of oil. This means that 86% of the State tax revenue comes from something other than oil, plus, the actual price of oil has been slightly under the $101 a barrel mark used by the Revenue Estimating Committee."
On the subject of the new Jena Choctaw Indian Casino south of Dry Prong, Fannin had this to say. "I don't look for any jump in gaming revenues in Louisiana or more people gambling. I think what we will see is just a small reshuffling of where people now go to gamble in Central Louisiana."
Since Fannin operates a feed and seed store in Weston, our next question concerned a down home scenario: "Do you think more people because of the state of the economy will be planting gardens this year."
"It is still early in the planting season, plus it is very wet right now," Fannin acknowledged. "Based on our sales of seeds, I think that last year fewer people planted gardens. However, two years ago was a big year for planning gardens. I have observed that some people only plant a garden every two years because in one growing season they can fill up their freezers to last them a second year."
The last question that the Journal had for Representative Fannin was: "You have been in office now for nearly ten years now, and have a couple more years to go to finish your term. Are you tired of the strain of going to Baton Rouge and dealing with what has been budget crisis for the last several years?"
"Well, I can truthfully say that I still enjoy my job as a State Representative and I am not burned out at this point," Fannin said in conclusion.