Hy and Christopher take on the possible unintended consequences of a constitutional convention this coming August. For example: there is a move afoot to get rid of the state income tax. Foster Campbell has a tax-swap idea that the powerful Louisiana Chemical Association would hate! However, an alternative is higher property taxes—which the voters would hate! (More on this below.)

Big political donors could give even more under a bill that is sailing through the state Legislature, but will it matter? House 906 by Rep. Mark Wright would raise contribution limits from $5,000 to $12,000 per donor for candidates running for statewide office and in the four biggest parishes, from $2,500 to $6,000 for candidates running for the state Legislature and in smaller parishes and from $1,000 to $2,000 for many local elections.  Due to the fact that SuperPACs can receive, unlimited contributions, Hy and Christopher speculate whether contribution limit should go up even further to $100,000– BUT equally that disclosure requirements should be almost instantaneous and online. The big flaw in the bill is that it retains the current reporting system, which takes weeks until you know who gave what money to whom.

President Biden and Donald Trump will meet for two debates on June 27 and Sept. 10, and they went around the Commission on Presidential Debates.  Is that because RFK Jr. might have qualified if the debates were in the fall?

Senate Bill 237, sponsored Sen. Thomas Pressly (R-Shreveport), would make it illegal to manufacture or sell products that contain any amount of tetrahydrocannabinol (THC) in Louisiana unless they are licensed medical marijuana products. The measure would wipe out what some consider an established industry in Louisiana.  Is this ban the right move?  Christopher’s father had a better quality of life in his last months before his death on June 25 of last year because of THC, and the effort by the Louisiana legislature to outlaw it negatively affect many medical patients in their final years.

To conclude, we wax eloquent on the 40th anniversary of the Louisiana World’s Exposition, yet we posed the question why doesn’t Louisiana stage something that big again? Why has not the United States held a World’s Fair since 1984?  And does Louisiana need to plan for another to reap the tourist benefits for four decades? (New Orleans gained 25,000 hotel rooms and the Warehouse District out of the last one.)  Olympic Committee for New Orleans 2084 anyone?

Now, more on that tax swap idea.....

Oil Processing - Income Tax Swap?
By Christopher Tidmore

Unintended consequences of LA constitutional convention could give rise to unorthodox policy ideas

Approval of a potential Louisiana constitutional convention appeared logjammed in the LA House and dead-on-arrival in the State Senate until Gov. Jeff Landry relented on his insistence that it convene in May— and instead occur in August.  That concession allowed House Bill 800 to pass the state House with 75 votes, but it also underpinned the unpredictability of what could occur if a convention ultimately is convened.

The delegates to the 1974 State constitutional convention far exceeded their original legislative mandate. What Gov. Edwin Edwards first envisioned as a simple “cleanup” of the existing document ended up as a massive rewrite.  That truism that ‘no Governor, however powerful, can control a constitutional convention completely’ could prove equally true this year.  It might even provide a way to eliminate the state income tax in a fashion which would make Gov. Jeff Landry’s allies in the Louisiana Chemical Association howl.  Or at least, that is the populist proposal which LA Public Service Commissioner Foster Campbell proposes, tax oil processing in order to end income taxes.

The idea underscores the law of unintended consequences if the governor is granted his wish for a constitutional convention.  Landry has argued that the gathering would restrict itself to merely “cleaning-up” the fiscal provisions added by amendment over the last 50 years, which has rendered Articles VII and VIII almost as long as the original document.  The governor has also pledged to protect the $75,000 homestead exemption and the Minimum Foundation Formula for K-12 education. Moreover, by appointing 27 of the 171 delegates to the convention, Landry hopes to maintain an added measure of control.  (The remainder are the members of the state House and Senate.)

However, his proposed delegates are former speakers, senior statesmen, and distinguished Louisiana leaders, who might try to establish the legacy of a document that will affect voters for at least another 50 years.  They could easily exceed their original mandate, and the governor would possess no veto power over their work.  The final document would go straight to the voters, and the need for the electorate to pass the document is what Foster Campbell has predicated his proposal.

The Democrat from Bossier City announced his “challenge” to the looming convention (and the GOP governor) on Jim Engster’s “Talk Louisiana” radio program as well as issuing a news release to that same effect later in the day. Engster noted Lt. Gov. Billy Nungesser, another Republican, recently endorsed Campbell’s “Foreign Oil Tax” proposal, which would require changes to the Louisiana Constitution.

Under the current state constitution, oil and gas stands only subject to severance taxes, which are levied on natural resources drilled or mined within Louisiana’s borders.   In addition, Campbell suggests the August constitutional convention create a tax on all foreign and offshore oil processed or refined in Louisiana and use the revenue to offset an elimination of the state income tax.

“The oil companies damaged our coast,” Campbell explained. “It’s time for them to pay their fair share in taxes.”

Campbell is an expert in attracting bipartisan support for populist policies in the regulation of utilities companies, pipelines, and energy infrastructure.  As a Democrat, Campbell won a fourth term on the Public Service Commission in 2020 in a North Louisiana district that voted overwhelmingly for Donald Trump on the same ballot.  He contends that “Everyone except the petrochemical industry” would support the tax swap and the governor would gain political support as a result.

“Gov. Landry can use the revenue to eliminate the state income tax,” he said. “He’ll be remembered forever if he does this.”

Well-entrenched oil and gas lobbyists repeatedly have beaten back this proposal in the past, yet Campbell said the timing is ripe for such an idea given Landry’s desire to hold a constitutional convention.  No limits exist for the delegates.  Moreover, since at least a third of the delegates will not face the voters for reelection, and therefore never need the campaign contributions of the lobbyist class, unorthodox proposals which might work well at the ballot box might have a chance. After all, the current proposal being floated—to eliminate the income tax by raising property taxes to make up the revenue difference—hardly enjoys much public support.

The processing tax may or may not succeed, yet it is hardly the last revolutionary proposal that the constitutional convention will review— and it will be hard for Landry to stop all of them from making it into the text of the final constitutional draft.