LA. STELLY PLAN REVIVAL? Louisiana’s fiscal cliff is scheduled to hit July 2018 when the 1-cent sales tax expires, estimates are that will create a $1.2 Billion-dollar deficit. There’s been little progress from legislators in addressing this budget-hole as evidenced by failed efforts during the past six legislative sessions. There’s little appeal to reinstate the one penny sales tax and gas-tax proposals have been defeated. But a former constitutional amendment… the Stelly Plan may be revived. Louisiana House Speaker Pro Tem- Walt Leger a Democrat from New Orleans explains, "“The people of this state voted to implement Stelly in 2002, but when we repealed the personal income tax portion and we failed to address the sales tax exemption portion, we created a hole. And we created a structural problem with our finances.”
The Stelly Plan named after former legislator Vic Stelly of Lake Charles was a constitutional amendment that removed the state sales tax on food consumed at home, utilities, and prescription drugs but raised personal income taxes to offset the shift. But middle-income tax payers complained they paid more tax than what was saved on sales tax. Even though the Stelly Amendment was approved by voters and made part of the state constitution, it was repealed a piece at a time by simple majority instead of 2/3rds majority required by both houses for a complete repeal of a constitutional amendment. And so the very method of repealing the Stelly Plan by simple majority vote may be the key to re-instating it as a coalition of Democrats and Republicans are giving it another serious look.
