Louisiana Senate Bill SB7

Louisiana 2016 2nd Special Session

• Introduced: 6/6/16
• Refer: 6/6/16
• Refer: 6/7/16
• Report Pass: 6/13/16
• Refer: 6/14/16

Caption

Provides for increases to the earned income tax credit. (See Act)(Item No. 47) (EG -$20,000,000 GF RV See Note)

Impact

The passage of SB 7 is expected to have a significant impact on the state's tax policy and budget. The increase to the EITC could lead to an estimated revenue loss of approximately $20 million for the state’s general fund. Proponents argue that this relief is essential for families who are struggling to make ends meet, particularly in a state with many residents living below the poverty line. The increase is seen as a positive step towards supporting low-income workers, encouraging financial stability and consumer spending.

Summary

Senate Bill 7, introduced by Senator Morrell, aims to increase the state earned income tax credit (EITC) from 3.5% to 5% of the federal earned income tax credit for eligible individuals. This increase aims to provide additional financial relief to low-income families in Louisiana by allowing them to retain a greater portion of their earned income, thereby incentivizing work and helping to alleviate poverty. The bill is set to become effective for tax periods beginning on and after January 1, 2016.

Sentiment

The sentiment surrounding SB 7 appears largely supportive, particularly among lawmakers and advocacy groups focused on low-income issues. Supporters argue that increasing the EITC is a pragmatic solution to help working families and stimulate the economy. However, there may be concerns from fiscal conservatives about the impact on state revenues and budgeting, reflecting a common tension between tax relief initiatives and budgetary constraints.

Contention

While the general sentiment is favorable, there could be points of contention related to the bill’s fiscal implications. Critics might highlight the potential strain on state resources and the importance of ensuring that any tax cuts do not adversely affect funding for essential services. Balancing the need for tax relief with responsible fiscal management will likely be a critical debate as the bill moves through the legislative process.