[StBernard] Senate backs new tax break

[Westley Annis]

Senate backs new tax break

 
 
BATON ROUGE (AP) -People and businesses who are paying higher property
insurance premiums since hurricanes Katrina and Rita should get a tax break
for those increased costs, the Senate agreed Monday.

The tax break proposal by Sen. Walter Boasso is one of many moving through
the Legislature, only some of which will be enacted. Senate and House
committees also approved a handful of other tax cuts on Monday, including a
"sales tax holiday," a change in state inheritance law and business tax
breaks.

The Senate with a 34-1 vote approved Boasso's bill, a plan to create
refundable tax credits estimated to cost Louisiana $500 million over the
next two years. Boasso, D-Arabi, and other supporters said it was a small
cost to help people struggling to recover from the hurricanes in the face of
large insurance increases.

"What we have now in Louisiana is an insurance crisis like we've never seen
before, and it's completely paralyzed Louisiana, both in its recovery and in
its future," Boasso said.

Under the bill, residents and businesses would be able to take a tax credit
for their 2007 Louisiana taxes of 78 percent of the increase in their
property insurance premiums since 2005. For the 2008 tax year, they would be
able to take a tax credit of 48.5 percent of the increase.

Boasso said the state could afford the two-year tax break by dipping into
surplus funds from the current and last fiscal years. The senator said that
money was generated partially by the hurricane recovery as people replaced
damaged goods and businesses paid higher wages because of labor shortages -
boosting state tax collections.

But the bill far from certain of passage in the House. The House is
considering other ways to spend those unbudgeted dollars that don't
anticipate the insurance tax credit. The only senator to vote against
Boasso's bill was Sen. Robert Adley, D-Benton, who said the tax credit
represented a giveaway that helps insurance companies and wrongly puts the
state of Louisiana in the business of paying people's insurance bills.

"I don't think that's good policy. I don't think that makes sense," Adley
said.