(The Center Square) – Tax changes approved this year will reduce state taxes by about $20.4 million next fiscal year, according to the forecast adopted Thursday.
About $15.8 million in those reduced taxes would come out of the state general fund, the estimate indicates, which is the portion of the state budget over which lawmakers have the most control.
Lawmakers during this year’s sessions approved several tax breaks they said would provide some relief to businesses struggling amid the COVID-19 pandemic and the economic slowdown meant to contain the disease. Some of those proposals started out in a posture that would have had a more significant impact on state collections but were amended to lower the tax breaks, legislative economist Greg Albrecht said.
During Thursday’s meeting of the Revenue Estimating Conference, Senate President Page Cortez questioned Albrecht’s estimate that exempting casinos from taxation on their first $5 million in promotional play wagers, which are vouchers for free play meant to get customers in the door, would cost the state more than $9.5 million.
If a promotion brings in a customer who wouldn’t come out otherwise, and they continue to play once their voucher has been used, that’s a net gain to the state’s coffers, Cortez said. But Albrecht said industry representatives, who supported the change, were unable to present evidence the promotions bring in many gamblers who wouldn’t have come regardless.
He said casinos had a “fabulous month” in June after the facilities were allowed to reopen.
“The customers want to come back,” Albrecht said.
By contrast, Albrecht predicts reducing the amount of money the Louisiana Lottery must transfer back to state operations from 35 percent to 25 percent actually will increase state collections by $2 million next year. He said lottery officials presented clear evidence that allowing them to keep more revenue and offer bigger prizes leads to more players and more revenue overall.
The current forecast for next year predicts about $9.25 billion in general fund revenue, which includes about $90 million from the state’s “rainy day” fund, though that forecast will be revisited in the coming months. State tax day was pushed back to July 15 this year because of the pandemic, so it’s still too early to guess at how the numbers will look, Department of Revenue Secretary Kimberly Robinson said.