Governor Jeff Landry Opens Special Session on Tax Reform

Baton Rouge, LA - On November 6, 2024, Governor Jeff Landry opened his third special session, which fulfills his promise to fix our broken tax code and bring economic prosperity to Louisiana. 

Remarks as prepared:

Mr. Speaker, 

Mr. President, 

Ladies and Gentlemen of the Legislature,

Secretaries and Department heads,

Distinguished Guests,

Our Parish Presidents and local officials, 

Our great teachers, 

BESE members,

Local pharmacists, 

Our heroic veterans,

And small business owners.

Thank you for your warm welcome.

And thank you for your service to this state… 

A state that we all love… and are proud to call home.

As we gather together, let us acknowledge that the people of this nation last night, sent a RESOUNDING crystal clear message that “NOW is the time to fix our economy”.

NOW… is the time to give relief to our families who are struggling.

And in Louisiana - our economy, 

…the incomes of our families

…the small businesses that are the bedrock of this state - have struggled for far too long.

One thing is evident from the results we are digesting - it was the voters from all walks of life demanding help. 

All ages, all parties, young - old, 

black - white - hispanic, 

the people of this country - and of this state – 

are ready for us to fix THIS economy

and they are ready to keep MORE

of their hard earned money.  

That’s why we gather at the beginning of this Special Session with the opportunity to accomplish something SPECIAL.

Let us be remindful that the people of this state chose us… 

To move Louisiana Forward

To restore our rightful place as a gem of the south. 

To enable our state to thrive with opportunity and unbridled growth.

AND to become a state ready to fulfill our promises, our dreams, and realize its’ God-given potential.

Our tax code has not seen significant change since 1974. 

In the 50 years since, the world around us has changed greatly - but this book has remained the same.

This tax code is bloated.

This tax code is broken.

This tax code is incredibly out-of-date.

and, THIS tax code is holding back our state.

At nearly 1,400 PAGES, it is filled with special interest carve outs, loopholes, and latent benefits for a few. 

It’s been patched together with duct tape and bubble gum moving us from one fiscal cliff to another.

Combined with Article 7 of our State Constitution, which stands at over 31,000 words, nearly twice the size of the entireU.S. Constitution.

This article has held us back in the rapidly changing economy of today’s modern world. 

The time for us to courageously bring these documents forward to current-day standards is NOW.

Nearly 40 years ago, the Council for A Better Louisiana issued a book THIS BOOK, “Louisiana’s Fiscal Alternatives: Finding Permanent Solutions to Recurring Budget Crisis”.

It called for tax simplification.

It called for greater fairness.

It called for the broadening the tax base.

It called for ways to stabilize our budget.

It called for Louisiana to have a competitive tax structure.

Here we are, 40 years later, and their recommendations 

have proven to work extremely well - FOR OTHER STATES.

Making these proposed changes will take courage and strength, but we have something today, that our predecessors did not have.

We have PROOF that these policies work by the multiple examples of success seen in other states.  

States which have charted a course for reform—THEY have now given us both a path and blueprint to follow. 

Look at North Carolina, once lagging - as we are today.  

In one short decade since modernizing their tax structure- North Carolina is now growing at a record pace and is ranked as one of the best places in America to do business.

When North Carolina embraced tax reform, their median family income rose $11,000 a year.  

Think about what an extra $11,000 per year would mean to the families you represent.

Every one of our Southern neighbors has adapted, or is adapting for growth and success, and they are winning because of it. 

Louisiana must change or sadly other states will continue to rob us of our children and grandchildren. And the extraordinary talent they possess.

We have children in the audience whose future is at stake. 

Will the kids from St. Jude school here in Baton Rouge please stand up?

Take a look at them. 

If we do not act, research shows that 1 in 4 of these children will leave Louisiana for another state and better opportunities. 

You and I know what we need to do...for THESE children, our kids, and our grandkids.

The time for piecemealing, stalling and kicking the can down the road is over.  

The time for selectively passing partial aspects of this proposal and not others, will leave us halfway across the river.  

The time for special interests to benefit off of our working families is over. 

The structure of this package makes its’ success dependent upon its’ entirety.  

Today let us take the whole rather than a slice.

Fundamental modernization is necessary to raise the quality of life and allow our citizens to realize their dreams. 

Fundamental modernization is necessary for us to retain our best and our brightest and bring our people back home.

Fundamental modernization is necessary for us to “Move Louisiana Forward.”

And perhaps nothing is more fundamental in this context than the taxing of labor by a government.  

Taxing labor is wrong.  

Taxing labor is unfair.  

Taxing labor is economically debilitating.

Because God is the creator of our labor.  

There is nothing more noble than to give your time and effort day after day to provide for your loved ones.  

A person’s labor is a person’s precious and irreplaceable time.  

And no Government should endeavor to tax what God has given us. 

By moving away from taxing the hard work of our people, we  begin to derive revenue from their choices.

Our citizens should get to choose how, when, and where they spend their money.

This one change signals to our constituency that we, as their elected leaders, trust THEM to make sound decisions with their own hard-earned money. 

A tax system utilizing an equitably administered sales tax broadens the base so that EVERYONE, and I mean EVERYONE, pays a fair share. 

No free rides, no special treatment, no preferential advantages for the chosen few.

Government should not be picking winners and losers in any tax code.  

But unfortunately, that’s exactly what we have done for far too long.

The plan presented today represents the largest tax cut in the history of our state. 

We accomplish this by broadening the base of collection so that everyone using the services of government, pays for the services of government. 

Under this concept, every single person is treated the same.  

Those entering our State are treated the same.

It’s no secret that our state enjoys millions of visitors annually---They too will be taxed equally when they spend here. 

Those here unlawfully will also be taxed equally; to help us offset the burden they bring to our communities. 

Most importantly, our sales tax system will become more fair, more transparent, and more equitable.

Our current system has over 215 exemptions.  

Each and every one of them serves to demonstrate that those with political clout - were able to secure preferential treatment at the expense of someone else.  

Special interests get special treatment while the laborer pays the bill.  

We can right that wrong, by removing many of these unfair and illogical exemptions that originated because of special access, favoritism, or politics.

Under the current system, a wedding planner is treated differently than a florist.  

A mechanic is treated differently than a tattoo artist. 

A lobbyist is treated differently than a small business owner. 

Our proposal starts the process of ELIMINATING special treatment for the chosen few, while restoring equity to others who now carry that heavier burden of taxation.

Fundamental fairness is at the very heart of this plan. 

Fairness that will position Louisiana for growth and opportunity.  

Fairness that will resonate across this State and bring the economic stimulation we have seen proven by example in other states.   

Cutting our personal income tax by 30% - from 4.25% to a flat 3%, will trumpet a new day in Louisiana. 

We will effectively eliminate the income tax for the working poor, 

Collapsing the next two brackets--reducing the tax burden on everyone, 

And placing us on the promising path of eliminating it once and for all.

Our small business owners in this state have stayed  through bad government, high taxes, bad roads, and natural disasters and you have remained. 

I would like to sincerely thank you. 

You are the backbone of our communities. 

What you do is not easy.

Take James and Gail Nolan for example—who are here today. They are the owners of Parish Ready Mix—with 80 employees.

Most of our small businesses, like them, pay taxes as individuals.

Our income tax reductions will give them MORE money to invest, to grow, to hire, and to compete.

Moreover, we also propose to cut the corporate income tax from an uncompetitive and obstructive seven and a half to a new low of three and a half .

And we eliminate the Corporate Franchise tax that has long been a roadblock to economic development.  

It’s a prehistoric relic whose time has come and gone.  

Economists of every stripe have routinely criticized it as one of the worst tax policies known.  

We propose ending it, deleting it, and eliminating it from Louisiana FOREVER.

This is a signal to the world that Louisiana is open for business!

Welcome Home!

As elected officials we are given the awesome responsibility of managing our people’s hard-earned money.  

It is their treasure that funds our government.

Everything we do in this Capitol should be done within the restraints of the revenue they provide. 

The deans of this body, those who have been here the longest, know all too well that our current fiscal structure is too fragile, 

And far too dependent upon volatile revenue.

The term “fiscal cliff” has paralyzed YOUR ability to plan and invest in a better state for far too long.

Forty years ago, the oil and gas severance tax represented 40% of our annual revenue - today it represents less than 5%.

We repeatedly hit these fiscal cliffs at every decline in the price of the barrel. 

The actions of countries like Russia, Venezuela, Iran and others in the Middle East - countries that HATE America - have had an outsized impact on the funding of our schools, our colleges, and the healthcare of our people.  

It’s wrong, it's frustrating, it’s insulting but we can fix it now. 

To properly and responsibly budget our government requires financially sound revenue forecasting. 

No longer should we forecast on one-time, unpredictable, unreliable, non-guaranteed funds that may or may not show up.  

Here in this building, we have counted upon temporary taxes before they are ever collected and wonder why we struggle.

With the changes we propose in this session, we can once and for all stabilize our budgetary process - giving YOU the ability to finally embark on fiscal responsibility. 

WE have dedicated our revenue resources to the point of dysfunction in this capital. 

Take for example, we have 2 billion dollars…billion with a B!

Locked away in an educational fund doing absolutely nothing for our people.  

Our proposal frees this money to finally and readily be used for education. 

I am tired of our teachers being used as political pawns and given crumbs at election time to fulfill soundbites and respond to momentary political pressures.  

Joining us today are teachers from across our state—from Lafourche Parish all the way up to Richland Parish.

As well as our BESE members. 

Would you all please stand up. 

These teachers in front of us deserve a permanent pay raise. 

And the truth is, we HAVE the money to pay our teachers properly, IF we make the changes to unshackle ourselves from the bad decisions of the past. 

That’s why we’re proposing to free up that 2 billion dollars and responsibly use a portion of that money to pay down the debt in the Teachers’ Retirement System. 

This will stop us from wasting $300 million every single year on ridiculously high-interest payments, which is nothing more than a giveaway to big banks and Wall Street.  

Freeing up this money enables us to invest in our public school teachers with a permanent and sustaining pay raise of $2,000 on average.

Finally fulfilling our promise.

Our senior citizens deserve respect and support. 

Our society was built by their hands and rests upon their shoulders.  

Our state and our nation owe them a debt of gratitude, especially those who worked to protect our freedom. 

With us today are some of those heroes. 

Please join me in thanking them for their service to America!  

We aim to keep them here in Louisiana - instead of watching them leave to other states where their retirement income goes further.  

That’s why we propose to more than double their income tax deduction--increasing their spending power.  

For these reasons, we also propose expanding the sales tax exemption on prescription drugs.  

This will not only benefit our seniors but those reliant upon medications as well.

For example, take Kimberly Wixson, she's a pharmacist and the owner of Cottonport Corner Drug Store in Avoyelles Parish. 

She is here with us today. 

Not only is she fighting cancer herself, she also serves her those in her community who are facing severe illness. 

Louisiana is one of the few places in the country where sales taxes are added to the already significant cost of prescription drugs.

Our tax plan will take away the tax on prescription drugs—helping folks like Kimberly Wixson and our people.

Let’s agree to totally eliminate the sales tax on prescription drugs once and for all!

We must bring our tax code up to date.  

No one uses a phone book anymore.  

Pay-phones are obsolete.  

Horse drawn carriages have been replaced with self-driving vehicles. 

Renting movies from Blockbuster has given way to digital streaming with the click of a button.  

Yet, these and many other obsolete items still clutter our tax code. 

Our sister states have long since modified their tax codes to reflect the digital age.  

We CAN  and must do better. 

Like most of you, I am no fan of our bloated, cumbersome, and outdated State Constitution.  

It handcuffs both you and our local governments’ ability to move us forward.  

Modernizing Article 7, and putting it before the people for approval will enable us to: 

-reduce income tax rates; 

-double the standardized deduction for seniors; 

-make the inventory tax optional for local governments; 

-reform the property tax exemptions and numerous funds imbedded in our constitution; 

- AND once and for all give our teachers a much-needed and permanent pay raise.

Today we have numerous parish presidents and police jury administrators here. 

Would you all please stand up!

My commitment to you is that at each and every step we will work to ensure that our local governments are made whole. 

Allowing YOU, our local governments,  the flexibility to improve your local economies while creating more stable revenue streams.

I truly believe that when this special session is over - and we enact these modernizations and reforms - EACH AND EVERY ONE OF YOU can return to your districts, look your constituents in the eye, and tell them that they will be better off because of your hard work. 

You can also tell them - that you passed the largest tax cut in history of this State. 

In Louisiana, as you know, we have a constitutional obligation to pass a balanced budget.  

The runaway growth of our government has been too constant for too long.

With your support, we have already slashed over two billion dollars in government bureaucracy.  

By holding the line on the growth of government - we’re going to continue to make state government more efficient, more effective, and more responsive to the people. 

Since our inaugural day - we’ve shown the people that we mean business.  

In our special session on crime - we prioritized public safety.  

We made much needed changes...putting the rights of law-abiding citizens and our police ahead of the rights of those who disregard our laws.  

And it's working. Crime is down.  

Our major cities, especially New Orleans, are seeing the direct results of your actions. 

In the regular session, we passed major improvements to our education system and restructured our economic development system, with real results coming shortly.  

We are continually taking steps to streamline our government to make it more effective for our people and more attractive to job creators.

You have trusted and worked with us in these past sessions and the dividends to our state are tangible.  

Likewise, I implore you to look at this plan carefully, but also collectively.  

There is not just one bill in this session that will turn this state around.  

The ENTIRE package fixes what’s wrong and is required of us.  

This debate has lingered over our state like a dark cloud for generations.  

The time for tweaking, arguing, or making perfect the enemy of good has long passed. 

For all of my faults, I am not one to let grass grow beneath my feet and I will not ever have it said of me that I had an opportunity to right this ship and I let it pass.  

I did not run for a position; I ran for a JOB !  

I did not seek this obligation to patch the roof and let the next person deal with it after the next storm.  

I am not here to pass the buck one more time for someone else to fix.

And I believe neither are you!

To me, that is the height of irresponsibility.  

This state has far too much potential, let us finally unshackle her with our labor this session. 

You too have answered the call of public duty – and you have worked diligently and sincerely in two special sessions, a regular session, and now this one convening. 

For that I thank you and the people you represent thank you as well.

Together we have indeed made great progress for our people - but we have only just begun. 

I truly believe that, when you look at the magnificent results other states have seen, we can deliver for our people what they have delivered for theirs.  

These next two weeks can mark a historical turning point that will be recognized as a milestone in the rebirth of Louisiana.  

It’s really up to you and I implore you, let’s not waste this precious opportunity.

For we know of our own greatness. 

The people we represent make up the most diverse, colorful, faithful, and enchanting communities in America.  

Our people invented hospitality.  

Our people care for one another.  

Our people love and help their neighbors.  

Our people have a work ethic second to none.  

With the changes we can make in this session, the economic drivers will come, and they will look closely at Louisiana.  

When they do, they will not only like what they find in our beautiful state...they will fall in love with Louisiana. 

All we have to do is open the door for them.

God bless Louisiana and the people we represent!