John Alario: Bobby Jindal will propose saving the state around $500 million by refundable tax credit alterations

http://www.nola.com/politics/index.ssf/2015/02/john_alario_bobby_jindal_will.html

Senate President John Alario said Gov. Bobby Jindal will propose saving the state around $500 million by changing some of Louisiana’s refundable tax credit programs during the governor’s budget presentation Friday morning (Feb. 28).  

Jindal has said repeatedly that he would be willing to consider scaling back some refundable tax credits to help plug the projected $1.6 billion hole in the upcoming budget. The governor is willing to cut the amount of money Louisiana gives out through the refundable program that is above and beyond the taxes owed. 

Louisiana’s 28 refundable tax credits cost the state around $777 million per year, but 75 percent of that money is spent on payments that go above and beyond taxes owed to the state. This means Louisiana spends about $590 million giving away money that would never actually be paid in taxes. 

Alario said he couldn’t provide specifics about which refundable tax credits Jindal would consider altering, but the governor has already indicated he won’t scale back a few of these programs that benefit the poor. 

Below is a chart provide by the Louisiana Department of Revenue that includes the refundable tax credits available and initial estimates about how much is spent on each program. The dollar figure listed under “Amount refunded that doesn’t offset tax” is what Jindal would consider altering.  

(Note: As mentioned above, the governor has already indicated that he isn’t interested in changing a few of programs listed below — including the Earn Income Tax Credit and school readiness benefits — so it’s unlikely that those credit payments would be reduced. The two programs benefit low-and-moderate income families.)