The state appears set to run a surplus for the third year in a row, with early estimates showing Louisiana may have collected 300 million more in taxes than it spent.
Legislative Fiscal Office Chief Economist Greg Albrecht says the surplus is mostly due to two things, one of them being the impact of the Congressional tax reform on Louisiana income tax returns. “Those changes reduced people’s federal tax liabilities, and by doing that we have a smaller return on the state return for federal taxes paid.”
Albrecht says the other reason is the steady elimination of a series of corporate income tax deductions over the past four years, which increased state revenue. “We have started doing things to corporate income and franchise tax collection going back as far as the sessions of 2015 to expand and extend the corporate income and franchise tax.”
Governor Edwards says the surplus is an example of the state’s improving economy, but Albrecht says the state’s slowly improving outlook isn’t the primary reason why revenue is up.
“It’s going up, not going down, so that’s a plus too, but the bigger effects have been the federal tax law changes and some of the changes we made on the corporate income and franchise tax side.”
Albrecht adds the state has added money to its budgetary forecast to try and compensate for the increased revenue, but their estimates have turned out to be too conservative.