Louisiana Reform Plan Rejected; Districts Lose Tax-Raising Right

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Louisiana lawmakers have rejected a massive tax-reform bill that would have authorized school districts to raise some $300 million for "noninstructional" expenses that Gov. Buddy Roemer hopes to cut from the state budget after the current fiscal year ends.

Acting in the final hour of a 24-day special session last month, the House voted 60 to 45 in favor of Mr. Roemer's tax plan, 10 votes shy of the two-thirds majority needed for approval.

"I am deeply disappointed that we didn't achieve this final victory," Mr. Roemer said of the defeat of his proposal, which was designed to wean the economically depressed state from its dependence on oil revenues and sales taxes.

Some legislators said the tax bill's fate was sealed by a controversial provision that would have lowered the state's existing homestead exemption, which now makes property worth less than $75,000 immune from taxation.

Others said the time simply was not right for a far-reaching tax change. "They're trying to reform something in the middle of a depression," said one observer. "Things are still very, very bad here."

The bill's defeat leaves the state's 66 parish school boards without a way to raise local revenue to supplant state funding for transportation, utilities, and other noninstructional purposes.

The tax-reform bill would have allowed districts to impose a one-cent sales tax to cover most of the shortfall. But lawmakers said the provision was unpopular with many local boards, which are accustomed to having the state shoulder most of the burden of paying for schools.

Mr. Roemer failed during the regular session this year to remove such items from the state's minimum-foundation program. Instead, yielding to opposition from local boards and superintendents, the state picked up almost the entire tab for noninstructional costs in what the Governor termed a "bridge" until an alternative could be agreed upon.

The Governor said he still hoped to shift the focus of the minimum-foundation program, which is set by the state board of elementary and secondary education.

That body's school-finance advisory board is studying ways to revise the minimum foundation. It plans to submit the proposed revisions to the legislature in February.

The tax bill's defeat also means the state will be "hard pressed" to come up with the $167 million it will need next year to fund a pay increase for teachers approved by lawmakers during their regular session, noted Representative Jimmy Long, chairman of the House education committee.

A spokesman for Mr. Roemer said the Governor was considering calling another special session. Action to revamp the state's tax system will have to occur soon, however, because Louisiana's constitution forbids tax increases in odd-numbered years.

The alternative to tax reform may be even greater austerity, Representative Long warned.

"We may just have to cut and cut and cut, but now we're in the area of cutting basic services," he said. "We're beyond cutting fat."--p.w.

Vol. 08, Issue 10

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