State sales tax expansion possible
BATON ROUGE - There's talk around the Capitol of expanding a state sales tax for everyday items. Under the Louisiana's constitution things like groceries, gasoline, prescription drugs, and residential electric bills are exempt from a state sales tax.
"Those are some of the most stable and consistent purchases consumers make," said Scott Drenkard with the Tax Foundation. Drenkard is one of the voices calling for an overhaul to the state tax system.
In 2015 Louisiana faced a $1.6 billion budget deficit and it's already looking at another $700 million hole in 2016, according to the Legislative Fiscal Office. Taxing the consumer goods listed above could bring in over $1 billion dollars in revenue according to economists working with state.
Local governments are allowed to tax such goods and many have sales taxes ranging from 4% to 7%.
For years state lawmakers have used one-time revenue, like selling off state property, to pay recurring expenses for education and health care. This has caused national credit rating agencies, like Moody's and Standard & Poor's, to degrade the state's credit outlook from stable to negative.
The four top candidates for governor have stated they support tax reform of some sort. They've also committed to calling a special legislative session in January where tax reform is expected to be a high priority.