[StBernard] Senate votes to reverse part of Stelly tax plan

[Westley Annis]

Senate votes to reverse part of Stelly tax plan

Posted on 05/24/2007 


The Louisiana Senate voted today to reverse changes made in the state tax
code in 2002 and allow taxpayers to deduct home mortgage interest and
charitable contributions from their state returns. 

Senators voted to reverse part of the so-called "Stelly plan," the overhaul
of the state tax code aimed at lessening the tax burden on the poor and
shifting it to wealthier taxpayers. Stelly became increasingly unpopular
when much of the middle class realized more of the burden would be on them,
too.

Senators approved a bill by Sen. Robert Adley of Bossier Parish which would
also reinstate deductions for certain medical expenses. Under the bill, 

taxpayers would be allowed to deduct a portion those expenses, plus the
mortgage and charitable contributions, beginning next year. They would be
allowed to deduct 100 percent of the expenses in 2010.

The Adley bill would mean a loss in state tax revenue of $157million in
2008, $190 million in 2009 and $308 million in 2010, when the measure would
be fully in effect. 

The Senate voted 35-0 for the measure despite objections from Sen. Walter
Boasso, who warned state government's revenue is projected to flatten over
the next few years, once hurricane recovery funds are spent. 

The state is also receiving extra tax revenue from sharply higher oil and
gas prices.

The measure now moves to the House. 

The House's tax committee has considered a handful of bills to reverse parts
of the Stelly plan but has not voted on the measures. 

(From The Associated Press)