It’s that time again! Constitutional amendments are on the ballot across Louisiana on October 9th, and we are here to help you start making sense of what they mean. This year, we have four amendments on the ballot, all dealing with taxes and spending in our state. We will have a more thorough breakdown of the amendments as we get closer to October, but as a quick starting point, we have laid out a brief summary of each of the amendments:

Constitutional Amendment #1 – Streamlined Sales Tax Commission

Stop me if you’ve heard this one before: Louisiana is an outlier….

This amendment seeks to make it easier for entrepreneurs to do business in Louisiana by creating a commission that would oversee reducing the total number of sales tax collection agencies from 58 down to 1. Currently, Louisiana is one of only three states that utilize this fragmented approach to sales tax collection.

Constitutional Amendment #2 – Louisiana Tax Simplification Package

Speaking of being an outlier, Louisiana is one of only three states that ties its income tax to the federal income tax through a full deduction of federal income taxes. That reared its head most recently in 2019 when federal tax changes resulted in an automatic tax increase on Louisianans. This creates uncertainty and can result in tax increases and fiscal cliffs.

This amendment would fix that problem while also kicking into effect a cut to personal and corporate tax rates, simplification of the tax code, and beginning a phase-out of the state’s franchise tax. There are also provisions in the package that prevent future tax increases without a vote of the people.

Constitutional Amendment #3 – Changes to Taxing Authority of Levee Districts

This one’s a little complicated, so hang with me. If passed, this amendment would allow the seven levee districts created between January 2006 and October 2021 to levy a tax of up to five mills upon the vote of the levee board, but without a specific vote of the people (most local entities in Louisiana cannot levy a tax without a specific vote of the people). Levee districts that had been created prior to January 2006, other than Orleans Parish, currently have this ability, based on policy dating to the 1800s. Orleans Parish currently has the authority to levy a tax up to 2.5 mills, and that will not change with this amendment.

One important caveat: if the amendment does not get the support of a majority of voters in a particular affected levy district (even if it passes statewide) this taxing authority would not go into effect in that area. Of course, if the amendment fails statewide, it wouldn’t go into effect anywhere.

Constitutional Amendment #4 – Allows Budgeting Flexibility During Projected Deficits

Over the last several years, Louisiana has faced several so-called fiscal cliffs. A result of these cliffs has been tax increases to cover shortfalls. Much of our state budget is locked up in constitutional or statutory dedications, tying the hands of legislators who would prefer to move money rather than raise taxes.

This amendment would allow the legislature to move 10% of these dedicated funds to cover budget deficits, instead of the 5% currently allowed by law. This gives the legislature greater budget flexibility when facing fiscal cliffs.