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EDITORIAL: Don't make things worse

May 07, 2009

Louisiana's $75,000 homestead exemption is already the nation's most generous, but that hasn't stopped some misguided lawmakers from trying to increase it.Gov. Bobby Jindal ought to know better, though. His administration came into office promising to grow the state's economy and remove onerous taxes that prevent business growth.

But his apparent support of a bill that would expand the homestead exemption would work against those vital efforts. The bill the governor seems to like would tie the homestead exemption to the consumer price index, so that the amount of the tax break would increase with inflation. Gov. Jindal said that idea "certainly seems reasonable."

It might seem "reasonable" compared with bills that would double the exemption to cover the first $150,000 of a home's value. But that doesn't make it smart.

Dan Juneau, president of the Louisiana Association of Business and Industry, argues that this proposal would amount to the largest business tax increase since 1982, which is the last time the exemption was expanded.

Businesses already carry the heaviest tax load in most parishes. In Jefferson Parish, for example, homeowners' share of property taxes was only 24 percent in 2008.

Thousands of homeowners in Louisiana pay little or no property taxes as it is. According to the Bureau of Governmental Research, 245,000 homes in Orleans, Jefferson, St. Tammany and St. Bernard parishes are eligible for the current homestead exemption, and about 63,000 of those already are fully covered by the provision.

Raising the exemption -- even in increments, as proposed in House Bill 485 -- would wipe out millions of dollars in tax revenues that pay for services like schools, drainage and infrastructure repairs. Local governments could be forced to cut services or shift the burden to businesses and renters.

"We are certainly concerned about any proposal that would cause a major disruption in funding for local first-responders, local governments, " Gov. Jindal said this week.

The state also must be concerned about making sure that Louisiana can compete for jobs and provide good schools. Increasing the homestead exemption is not the way to do that.




September 2006