Quote of the Week
"This is not about a company in any kind of trouble, except that its owner closed it down," — Rep. Hollis Downs, R-Ruston, possibly sugarcoating the current and future prospects of the former Pilgrim's Pride poultry plant in north Louisiana. Gov. Bobby Jindal recently had the Legislature rewrite state incentive laws to lure Foster Farms of California into buying the shuttered operation. — Alford
The Tax Man Cometh?
Gov. Bobby Jindal has come out in support of increasing the homestead exemption, a move that's as complex as it is controversial. While proponents argue the change would decrease the amount of taxes paid by the middle class, opponents argue the local property tax burden would shift even more heavily onto businesses and renters, thereby negating Jindal's promise of no new taxes this year.
Meanwhile, Northshore Sen. Jack Donahue suggests the debate is going astray. He says the real reason homeowners are suffering is because local taxing bodies often use their discretionary power to roll forward millage rates after property is reappraised. The state constitution requires that millage rates automatically fall after reassessments to make them revenue neutral, but the constitution also allows taxing bodies, by a two-thirds vote, to roll the millages back up to their pre-assessment levels, thereby amounting to what voters see as a tax increase. Donahue has filed a constitutional amendment that would allow only elected bodies, such as school boards, councils and police juries, to roll millages forward after a vote of the people. Unelected taxing bodies could not adjust millages upward again.
Other lawmakers have similar bills, and while their collective fate is unknown, Donahue, R-Mandeville, says more people are becoming aware of how the system really works. "If enough money does come in, millages are rolled forward even past what the voters voted on," he says. "If voters had voted on 10 mills and it takes 15 mills to make the same amount of money, then the millage is rolled forward to 15 mills. Most people don't know that."
While lawmakers expect the roll-forward bills to gain momentum more easily than the proposed changes to the homestead exemption, those bills have been stuck thus far. Sen. Julie Quinn, R-Metairie, is lobbying to link roll-forwards to the Consumer Price Index; Sen. John Alario, D-Westwego, has proposed legislation that would prohibit the roll-forwards altogether unless voters approve it; and Rep. Jeff Arnold, D-New Orleans, wants to limit roll-forwards to 2.5 percent. As for the homestead exemption, that debate seems to be narrowing down to proposals that would boost the $75,000 exemption to keep pace with the Consumer Price Index, which is what Jindal favors. Even the governor's supporters and handpicked leadership question that move, however. Dan Juneau, president of the Louisiana Association of Business and Industry, says increasing the homestead exemption would essentially force renters, businesses and other homeowners to pick up the tab for the tax savings given to some homeowners. Juneau advised Jindal against backing an increase for that very reason. — Jeremy Alford
You're in Good Hands ...
A House committee has refused to adopt a set of bills that would have limited how insurance companies are allowed to increase health and homeowner insurance rates. Rep. Truck Gisclair, D-Larose, says he's been pushed to the limit by watching his friends and neighbors fight to obtain coverage that's badly needed but out of their price range. "I have constituents in my district right now that can no longer afford insurance," Gisclair says. "Lately, there just seems to be no end in sight."
His argument, however, fell on deaf ears as every member of the House Insurance Committee voted against his proposals. House Bill 92 would have prohibited health and accident insurers from increasing premiums or making other major changes more than once in any 12-month period. Last year, lawmakers passed legislation allowing companies to make such alterations every six months.
"Why can't we give an insurance company an entire year to go through the data and figure out what their costs are going to be, rather than having them do what they want every six months?" Gisclair asked. Gary Dupre, a spokesperson for the Louisiana Association of Health Plans, says despite what timeline is adopted, health care premiums will always reflect health care costs. "And you're still going to have to cover those costs, whether it's six months or 12 months."
Rep. Chuck Kleckley, R-Lake Charles, chairman of the House Insurance Committee, says Gisclair's bill would tamper with the industry too much. "To politically suppress rates might not be the best decision," he says. The committee also rejected Gisclair's House Bill 455, which would have prohibited insurers from using the Intracoastal Waterway as a line of demarcation to determine rates for homeowner's insurance rates. Business and insurance interests opposed the legislation, including Allstate Insurance, Farmer's Insurance, State Farm, Farm Bureau, the American Insurance Association and the Louisiana Association of Business and Industry. — Alford