Saturday, February 26, 2011

Monaghan: Place sunsets on tax exemptions

This week, Gov. Bobby Jindal issued a press release announcing a legislative plan that would, among other things, impose a sunset on fund dedications adopted by the legislature.

In a letter to the editor that is now appearing around the state, LFT President Steve Monaghan gives a nod of approval to the concept, saying that the idea should be applied to the state's 441 tax exemptions as well.

After all, if it is a good idea to periodically review fund dedications to see if they are serving their purpose, isn't the same true of tax exemptions?

Here's the text of Steve's letter:

In a press release issued this week, Gov. Bobby Jindal announced he will propose a package of bills including, among other things, a sunset provision for nearly all of the state's dedicated funds. These are the areas of the budget that are protected by either Constitution or legislation, which reportedly cannot be easily reduced.

And, as in all legislation, the devil sleeps comfortably in the detail, the governor's call for sunsets and reviews of statutorily protected funds speaks to common sense and good government.

The governor makes a strong point when he says these dedicated funds should be inspected by lawmakers on a regular basis to make sure their dedications serve a legitimate purpose, and are working as intended and that the intention satisfies a need and serves the public's interest.

This concept connotes transparency and accountability and it should also be applied to the 441 separate tax exemptions offered by the state that now cost taxpayers more than
$7.1 billion per year in lost revenue.

Is it really necessary to grant exemptions for drilling in the Haynesville gas find at a cost of more than $100 million to the state? Or to exempt sales taxes on purchases of gold bullion or Mardi Gras beads?

Perhaps these and the many other tax exemptions do serve the public well, but we don't know because once adopted, most tax exemptions are never revisited. Two-thirds have no sunset. So, while they can be passed by a simple majority in the legislature, it takes a two-thirds vote to repeal them.

We urge the governor to apply this standard to the tax exemption budget. Put a sunset clause on them, and give lawmakers the information they need to decide whether or not the exemptions should stay on the books.

Steve Monaghan, President
Louisiana Federation of Teachers

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