BATON ROUGE — This much is clear: An income tax cut is on the way.
But how soon most Louisianians will see a change in their paycheck has become increasingly muddled, raising questions about whether Gov. Bobby Jindal may have oversold the tax-cut compromise he announced last week.
While all sides agree that the rollback of the Stelly plan tax increase should kick in Jan. 1, the real effective date for most taxpayers depends on when payroll withholding tables are adjusted by the state Department of Revenue. And exactly when that change should occur remains an open question as the House prepares to take up Senate Bill 87 by Sen. B.L. “Buddy” Shaw, R-Shreveport, which seeks to repeal income tax increases that voters approved in 2002.
Although Jindal left the clear impression that taxpayers would notice a change in January, an amendment to the bill proposed by House Speaker Jim Tucker, R-Algiers, a top administration ally, would direct the Revenue Department to postpone changing its withholding tables until July 1, 2009.
Whichever date is chosen not only could affect worker paychecks, but also have a serious impact on next year’s budget.
If withholding tables are changed by Jan. 1, Shaw’s bill would drain $62 million from the treasury next year, according to a Legislative Fiscal Office estimate. But leaving the tables unchanged until July means the bill will have no effect on the 2008-09 operating budget, according to the fiscal office, as the vast majority of taxpayers would not change their tax withholdings on their own.
A typical Republican ploy–a tax cut–in a time the state revenue is down and funds cannot be found to continue some programs–a tax cut is not the best idea–but it is a Repub idea that hoodwinks the people into a false sense of security.