Louisiana Lawmakers Must Rethink Tax Moves After Ballot Failure

The defeat of Constitutional Amendment No. 2, a key component of “Louisiana Forward” that would have restructured the state’s tax code, was a setback in the broader tax reform effort. Louisiana lawmakers, whose regular session starts today, now find themselves at a crossroads.

Gov. Jeff Landry (R) and the legislature must grapple with several unresolved issues as they approach the new fiscal session. One of the most pressing questions is whether to pursue another attempt at constitutional reform.

There is growing discussion about restructuring the failed amendment into several more narrowly tailored proposals, which may be easier for voters to understand and support. At the same time, the loss of potential discretionary revenue forces lawmakers to reevaluate their priorities.

The legislature implemented several components of the tax package through statutory changes, including income tax rate reductions and the elimination of the franchise tax. Both went into effect on Jan. 1 and remain in force.

But the constitutional amendment carried more ambitious goals that couldn’t be achieved through statutory changes alone.

It would have given parishes the ability to opt out of levying property taxes on business inventory, a move seen by many as a way to improve Louisiana’s business climate. It also sought to relocate many property tax provisions from the constitution into statute, thereby granting the legislature greater authority to shape future tax policy.

Another critical component of the proposed amendment was the consolidation of two constitutionally dedicated funds: one for budget stabilization and the other for revenue stabilization.

This reallocation of revenue would have expanded the general fund, allowing legislators more discretion in budgeting. One of the intended uses of this flexible revenue was to repeal the personal income tax over time.

Another component of the proposed amendment was to eliminate three constitutionally dedicated funds to pay down the teachers’ retirement system of Louisiana debt, allowing for a permanent pay raise for teachers and school support staff.

Without the funding flexibility envisioned under the constitutional amendment, ambitious goals such as teacher pay raises and further tax cuts may have to be delayed or significantly revised.

As the regular session gets underway, the road ahead for the full implementation of Louisiana Forward’s tax reform plan still remains uncertain.

The deadline to file constitutional amendments has passed, and it appears lawmakers are going to debate the best option for getting provisions of Constitutional Amendment No. 2 passed at the ballot.

One representative has filed what appears to be a slimmed-down version of Constitutional Amendment No. 2 without some of the more controversial provisions.

Other representatives have filed separate constitutional amendments that tackle specific parts of Constitutional Amendment No. 2, including one to grant parishes the ability to opt out of levying property taxes on business inventory as discussed above.

Once committee meetings begin, we will know which direction the legislature will ultimately take in passing the provisions of Constitutional Amendment No. 2. Whichever direction they choose, it appears the constitutional amendments will be on the ballot Nov. 3, 2026.

To be proactive, we recommend either reaching out to lawmakers directly or through a local lobbyist. Additionally, taxpayers can testify at committee hearings, in either opposition or support. Trade associations are also a great way for businesses to get involved.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Jason DeCuir is co-owner and partner of Advantous Consulting, a multistate tax consulting firm based in Baton Rouge, La., and a founding partner of Advantous Law.

Blaike-Lee Ordes is a legal associate in Advantous’ appeals and disputes department.

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