March 30, 2007


by Rep. Steve Scalise
District 82

With a projected surplus of more than $1 billion, we have a unique opportunity this session to make significant reforms to our state's tax code. Rather than spending all of the surplus on new government programs, we should use at least half of this money to reduce the tax burden on families and businesses throughout Louisiana.

The most effective way the Legislature can help families is to repeal the tax increases brought on by the Stelly Plan. The Stelly Plan made a number of changes to our tax code. While it repealed the state sales tax on food and household utilities, it also increased personal income tax brackets and repealed some tax deductions that were enjoyed by families. The overall result of this change has turned out to be a multi-million dollar net increase of new taxes the state is collecting.

Legislation has already been pre-filed this year to modify the Stelly Plan to make it revenue- neutral rather than a large tax increase. Some bills will restore the excess itemized deductions for things like home mortgage interest and charitable contributions that were eliminated by the Stelly Plan. Other legislation will reduce income taxes by compressing the brackets closer to their levels before the plan took effect. Of course these proposals will spark an interesting debate on tax policy that will impact hundreds of thousands of families in Louisiana.

Over the last 20 years, Louisiana has been the only state in the South to lose population. Based on the loss of population we have been experiencing, we will lose a seat in Congress after the next reapportionment in 2010 unless we quickly start making our state more competitive. A large part of that exodus has been middle-class families. If we pass these tax cuts, we will be sending an important message to middle-class families that we want to become more competitive with states like Texas and Florida that have no personal income tax. We will also be sending a message that we want to reverse the trend of out-migration and bring back families who have left.


  1. The Stelly Plan is a disastrous tax increase that needs to be repealed.

  2. What is disastrous and particularly reprehensible is for the state to tax food and utility purchases by its citizens. Such taxes disproportionally impact the lower and working classes of the state who already are struggling to make headway in an economy being drained by the outsourcing of good-paying jobs. The majority of Louisianaians who struggle to make ends meet do not need the additional burden of these regressive taxes for simply trying to put food on their families table and heat in their homes.

    The wealthy can certainly afford to pay slightly higher income taxes as their share of the tax burden has been historically low and it is well past time for the working people of the state to stop subsidizing their luxury lives.

  3. I completely and wholeheartedly agree with NOLA blogger. The Stelly plan is the most unfair plan put forward by our "illustrious" state government. With Governor Blanco no longer running the surplus money in the Governments Treasury should first go to the people who funded that surplus, not to fund a supposed legacy.