Gov. Bobby Jindal (R-LA) last night opened a “fiscal session” of the Louisiana legislature with an address on the state’s finances and how to approach the $1.6 billion hole in its budget. During the speech, Jindal vowed to veto any tax increases, saying, “Tax increases kill jobs. Tax increases kill opportunities. Tax increases hurt economic development. Tax increases hurt our ability to attract new businesses into Louisiana.”
But as the Advocate noted, “the only real tax hike proposed thus far filed is an increase in the state tobacco tax”:
House Bill 63 by state Rep. Harold Ritchie would increase the 36-cent state sales tax on a pack of cigarettes by 70 cents. The state’s tobacco tax is among the lowest in the nation.
In the past, Jindal has explicitly voiced opposition to raising the cigarette tax, even though Louisiana’s cigarette tax is the second lowest in the country, after Virginia. According to the Louisiana Budget Project, the proposed increase in the cigarette tax would raise about $200 million, while also lowering health care costs. It would also provide almost twice the savings of Jindal’s proposal to raise tuition and fees for Louisiana’s college students:
Tucked in the pages of the $24.9 billion spending plan are provisions for spending more than $98 million that Jindal hopes the state’s colleges will get through tuition hikes on students. Separate legislation would need to be passed to enact the cost increases…The increases would come on top of increased costs for students already set to take effect this fall and more increases for at least four additional years, under legislation passed last year.
In the last two years, Louisiana has cut $315 million from higher education, even as it charged students more for tuition.
Louisiana’s current tax code is a mess, with 441 different exemptions that cost the state $7 billion per year, several times the size of its current budget shortfall. One exemption alone — allowing residents to deduct the amount they paid in federal taxes from their state tax bill — costs the state $643 million per year while overwhelmingly aiding the richest Louisianians. But Jindal has ruled tax increases off the table, deciding that the more prudent course is to force students to cover the cost of the state’s budget woes.