WASHINGTON- Yesterday, Gov. Mike Foster (R-LA) introduced his tax plan to the legislature.  The tax plan is a "temporary" tax asking for a half-cent increase on the sales tax.  He is asking for this tax to hold the state budget together until the Legislature can overhaul the entire state tax code.  In addition, Gov. Foster is asking for an increase in excise taxes which would remain permanent.  The following outlines the tax increases Foster is looking for:

  • $215 million from the half-cent sales tax.

  • $8.75 million from a 25% increase on beer taxes, adding $2.50 to the cost of a barrel.

  • $3 million from a 25% increase on liquor taxes, adding 16 cents to the cost of a liter (not including wine).

  • $49 million by increasing the taxes on a pack of cigarettes by 14 cents.

  • $10 million by increasing the telecommunications tax from 3% to 4%.

  • $5 million by setting a 1% tax on interstate calls.  The state currently taxes intrastate calls only.

  • $70 million by increasing the riverboat gaming tax from 18.5 % to 23.5% (LA already has the highest tax rate for riverboats, MS is only 8%).

This plan adds almost $361 million in new tax increases (some sources are indicating this amount may be even higher).  The budget short fall is estimated to be $269 million.

"If the budget short fall is $269 million, why is Gov. Foster proposing to raise taxes more than $360 million," asked Grover Norquist, president of Americans for Tax Reform (ATR).  "And how exactly did Louisiana end up with a budget shortfall in light of the strong economy over the last few years?"

"Gov. Foster signed our Taxpayer Protection Pledge," said Damon Ansell, vice president of policy at ATR.  "He pledged to the taxpayers of Louisiana that he would not do what he is doing.  He promised the taxpayers of Louisiana that he would oppose any and all efforts to increase taxes but now he is leading the charge to raise their taxes.  We will be watching this legislation and Gov. Foster very closely."