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Those of us who were victims of Hurricane Katrina, the U.S. Army Corps of Engineers and Hurricane Rita were given extended time to file our 2005 Federal and State Personal Income Tax Returns. Several weeks ago, I noted that those of us who suffered major casualty losses would receive NO break on our State Personal Income Taxes because, thanks to “The Stelly Plan,” casualty losses which are itemized deductions were taken away. At the time I didn’t know exactly how much would be the cost of this latest version of “Stelly Shock.”

Caution urged

When you get around to doing your LA Personal Income Tax (a business tax on us small businesses) make sure that you are not alone and are sitting down. Please don’t even start until you have fully recovered from paying your Homeowners’ insurance premiums and especially the surcharge to supplement those that are forced to use the LA Citizens Plan.

If you have a tax professional prepare your returns, don’t get the news about taxes while driving a motorized vehicle or when handling sharp objects. I was doing the former yesterday morning which my CPA called.

I am getting ALL my Federal Taxes back. However, I have to pay the state of Louisiana an ADDITIONAL $500!!

Legislative failures

The LA leges have met 3 times since the storms and the Corps struck us. Yet they failed to address two critical issues to our recovery.

First, the leges could have put some of the $750 Million in new state funds into the Citizens Fund to avoid us having to pay the outrageous surcharge (Even those of you not in the affected areas have to pay this new TAX.) on our newly-increased Homeowners’ insurance premiums.

Second, the leges could have reinstated the casualty loss deduction for the victims of the two hurricanes. Additionally, they could make sure that no other victims of such disasters are further victimized by the Stelly Plan by inserting language for all Federally-declared disaster areas in the future.

Both matters can still be addressed. Yes, I know that the leges have spent all our tax dollars on more important things such as buildings for goat shows and lawn mower races. However, more state funds will be found by the Revenue Estimating Conference as soon as the governor allows them to meet. They can be handled retroactively, but I’ve heard nothing about them even considering it.

I must stop here and go have a lunch of 10 penny common nails.

C.B.

Uncategorized CB 8:00 am

Jim Beam

In a speech on Friday (story here) New Orleans Mayor Ray Nagin blamed racism and the LA state and Federal governments for New Orleans’s woes a year after Katrina and the Corps of Engineers struck it.

Here are some excerpts from Jim Beam’s reaction in his column (here) in Sunday’s Lake Charles newspaper:

New Orleans officials have failed their poor, but they are quick to blame racism or the state and federal governments for their shortcomings. Blacks have been running New Orleans city government and education for a long time now, and blamlng racism for the city’s troubles is a cop-out.

You also have to wonder what happened to those billions of dollars the state spends every year on social services. Louisiana’s people are still some of the poorest in the country.

Beam, though very courageous will likely be blasted for being politically-incorrect, but it is what it is.

C.B.

Uncategorized CB 8:00 am

The headline of the story at the top of the front page of Wednesday’s Hammond Daily Star knocked the breath out of me.

It screamed: “Parish puts more money in roads.” How shocking! I thought the only way to get more money for roads in Louisiana was to raise taxes, build toll roads or implement tolls on the existing roads. Despite my many years of dealing with government in Louisiana, the concept outlined by the Tangipahoa Parish Council was a new one on me. Remember: this came on the heels of the Tangipahoa Parish School Board voting to lower our property taxes for this year.

Here’s how the unusual plan works.

Sales Tax revenues are up more than 40% in Tangipahoa Parish. At the suggestion of Parish President Gordon Burgess the Parish Council voted to spend a substantial portion of the extra funds on roads. In fact, during the current year, the Tangipahoa Parish Council will double the amount normally spent on roads each year.

Contrast this common sense (uncommon with LA public officials) approach with that of the LA Department of Transportation and Development. According to Johnny “Tollman” Bradberry, the state needs a couple of hundred million dollars in a revenue stream that it can bond (See TIMED Program for reference.) to help out the with the billions of dollars in backlog of road needs statewide. In order to generate the necessary funds to fix our roads, the state needs more revenues. Bradberry’s only solution is either placing tolls on the roads that we already have or RAISE TAXES. It’s that type of thinking that has led us to be last among states in places to do business.

Earlier this year, the state of LA recognized an additional $750 MILLION in STATE revenues. These were RECURRING funds which were promptly placed into the State General Fund (a.k.a. the Fiscal Abyss) to be spent on, among other things, local projects (a.k.a. pork barrel projects). In other words, it was estimated by the LA Revenue Estimating Conference that this money would be flowing into the state indefinitely.

This begs the question of why didn’t the governor and “Tollman” didn’t suggest using a portion of the new STATE revenues to leverage the billion dollar road building program.

However, there is an economic downside to such unique thinking (common sense). This will definitely put a damper on business at the front-end alignment, tire, body shops and auto dealerships in Tangipahoa Parish. Fortunately, the people of Tangipahoa Parish also travel on Interstate Highways 10, 12 and 55. That should keep the auto maintenance people in business for a few more decades.

I think I’m finally home.

C.B.

Uncategorized CB 8:00 am