Special Session - Tax Reform - Interview with Joe Mapes

[00:00:10] Welcome to The Pelican Brief, I am your host David Tatman.

[00:00:33] Our podcast has sort of evolved over time. We are trying different things to respond to our listeners.

[00:00:42] And we started with reporting news and updates from legislative sessions, from legislative activities.

[00:00:51] And we are going to continue to do that. And we're going to try to also bring you some guests and some perspectives.

[00:00:59] And so in Season 3, which is what this will be, we are going to talk to some veteran lobbyists about what they think is going on in Louisiana.

[00:01:08] And specifically in this season, we're going to be talking about the expected special session of the legislature

[00:01:16] that Governor Jeff Landry has suggested he was going to call in November.

[00:01:22] Conventional wisdom says it's going to start sometime in early November and sometime before Thanksgiving.

[00:01:29] It is a pretty aggressive agenda, outlined as wanting to lower income tax to make it flatter and broader.

[00:01:40] There are some other elements to it, like the renewal of the .45 cent sales tax that currently sunsets in June of 2025.

[00:01:52] And also some other changes to the laws relative to some constitutional amendments to allow the opening up of Article 7.

[00:02:05] Some taxes on a number of services that you're going to hear us talk about and various other things.

[00:02:12] This is a pretty aggressive package that is being proposed by Governor Landry and his revenue secretary, Richard Nelson.

[00:02:21] So one of our first guests in this process is going to be Joe Mapes.

[00:02:27] Joe Mapes is well known for his work with Farm Bureau and many, many other clients.

[00:02:33] Joe's been around for longer than I have, which is to say a lot because I'm kind of old and I don't know many people who have been around longer than I have.

[00:02:44] So we're going to try to have conversations bring you some perspective.

[00:02:48] Some people may not like what we say.

[00:02:51] Some people will definitely not like what we say.

[00:02:54] But what we're going to try to do is bring information to the forefront and hopefully there will be a dialogue that will be created that will help people be better informed and get us through this process in a knowledgeable way.

[00:03:10] So we're going to break this podcast with Joe up into two pieces because our conversation really was I feel like it was very good and I didn't want to cut it down.

[00:03:21] So we're going to now go to part one with Joe Mapes.

[00:03:27] Well, welcome, Joe.

[00:03:28] Thank you so much for joining us on the Pelican Brief today.

[00:03:32] We've got a lot going on in the state of Louisiana.

[00:03:34] I appreciate you being here and talking with us today.

[00:03:37] Yes, sir.

[00:03:37] It's always a pleasure to see my good friend David and to talk about these things that could possibly affect Louisiana.

[00:03:44] Yeah, no doubt about it.

[00:03:45] I want to give a little bit of a sort of a plug or I guess a memorial.

[00:03:49] You know, when I first started in this business, your dad was around and we became friends and he was just, you know, I mean, Bud Mapes should be like etched in the in the stone of the Capitol because he was literally such a legend.

[00:04:03] And I can't imagine what it's like following in his footsteps.

[00:04:07] So just loved your dad.

[00:04:08] He was a great guy.

[00:04:09] Thank you for those comments.

[00:04:10] And I agree with you.

[00:04:11] Yeah, he was great.

[00:04:12] He was also, as most people who remember, colorful.

[00:04:16] He always wore the bright ties and all that.

[00:04:19] But he was a great lobbyist, well respected at the Capitol.

[00:04:22] And he was at a time when when this profession, there was a lot of honor and integrity in the profession.

[00:04:28] And he helped set the standard for that.

[00:04:31] So, you know, just I can't.

[00:04:33] There's so many people that have, you know, moved along.

[00:04:36] Oh, yes.

[00:04:36] When we lost Bud, we lost a lot.

[00:04:39] Oh, he was an institution, a one man institution.

[00:04:41] And at his wake, everybody attended the governor.

[00:04:44] And back then we had a superintendent of education.

[00:04:46] Remember, it was right.

[00:04:47] I remember that.

[00:04:48] Yeah.

[00:04:48] President of the Senate was Don Hines.

[00:04:50] And they all attended.

[00:04:53] And Sandy had the idea, my wife, to put out a basket of Bud's colorful socks, along with some of his colorful ties and bolos.

[00:05:01] And so to this day, people in different segments of politics will walk up and pull up their pant leg and show me a pair of socks and go,

[00:05:07] Look, I got these at your dad's funeral.

[00:05:09] No, it's, yeah.

[00:05:11] Again, like I said, there's a lot of those.

[00:05:13] Cecil Picard included, you know, lots of legends at the Capitol.

[00:05:17] But you know how it works when you go on a couple of years, remember who you are.

[00:05:21] And it's a lot different down there now.

[00:05:23] But it's okay.

[00:05:23] He did good things for the people of Louisiana.

[00:05:26] That's right.

[00:05:26] So speaking of that, you know, you and I have been talking a lot sort of off the, you know, off of the, not off the record, but off of any sort of media like this and talking a little bit about this plan,

[00:05:39] this plan that, that Governor Landry and some legislative leaders are promoting relative to changing the tax structure in Louisiana, modernizing it, the lots of different parts to it.

[00:05:56] And, you know, I think that's a lot of people who are saying, you know, obviously Secretary of Revenue Richard Nelson is the lead on that.

[00:06:02] And initially, I don't think people were really aware, you know, saying that you're going to do tax reform sounds good.

[00:06:09] Reform anything sounds good.

[00:06:11] But getting down into the details, and I think since this was originally discussed, there have been a lot of concerns, a lot of people who are saying we want the details because details matter.

[00:06:29] And so this package would, would really seek to, so in committee this week, in Ways and Means Committee, Secretary Nelson testified that the Tax Foundation, this national watchdog group, said that if all of these proposals passed, we would go from 40th in the nation in tax policy to 8th in the nation in tax policy.

[00:06:54] So that sounds really good.

[00:06:55] But when we get into the details and we talk about the dollars and where they're going to come from, that's where it gets more, more, where there needs to be a lot more detail and more discussion.

[00:07:09] So I know you followed it.

[00:07:11] Talk a little bit about your perceptions, your, you know, ideas about what you think about this.

[00:07:19] Well, first of all, I would say it's a lot.

[00:07:23] Secondly, I would say that Secretary Nelson's got some great ideas.

[00:07:27] We heard him talk about some of them on the campaign trail when he was running for governor.

[00:07:31] I strongly encouraged him to run for governor and get that message out there.

[00:07:36] And back to what I just said a minute ago, but it's a lot.

[00:07:39] And I told him that at the time before he ran for governor.

[00:07:42] I said, you've got to get out there and get the message going, though, okay, because we do need reform.

[00:07:47] My concern is, David, is just like the Constitutional Convention that you and I discussed a few months ago, 21 days roughly.

[00:07:55] If you and I start talking about tax reform right now, that conversation's without a solid guide to that conversation.

[00:08:02] We're going to have that conversation going 20 different directions within the first few minutes.

[00:08:07] Yeah, there's no doubt about it.

[00:08:09] So what they've been basing a lot of these conversations on, and look, you saw it too, but I'll kind of lead off, is that they keep referring to North Carolina.

[00:08:18] So in 2013, North Carolina began to implement some of their changes.

[00:08:24] And a lot of the answers to the questions and ways and means committee discussions, which is where the bill would go, obviously, or bills.

[00:08:36] I mean, right now it's 10 bills, and we can get a little bit more in detail on that because we were with Richard yesterday,

[00:08:43] and he spoke to a group of us and talked about the fact that it might not be 10 bills, that three of the bills may be combined into one.

[00:08:50] Yeah, I heard there's a second folder of bills coming out, and some of those bills will be revisions of the bills in the first folder.

[00:08:57] That's right.

[00:08:57] And so the other part of that is when the governor calls the session, within his call, he's going to have to open up certain things.

[00:09:04] So Article 7 of the Constitution, you know, whatever.

[00:09:09] So, you know, just for our audience, whatever the call indicates, any legislator can file a bill within that subject matter.

[00:09:18] So it doesn't mean that the governor will have the only bills.

[00:09:21] And I've heard legislators talk about it.

[00:09:23] So it's an umbrella category.

[00:09:25] It is.

[00:09:25] And so you open it up, and anybody can file a bill in those categories.

[00:09:30] But so in North Carolina, they started in 2013, but they kind of bit off a little bit at a time, and they worked over.

[00:09:37] And that's my whole point.

[00:09:38] Right.

[00:09:38] That's my whole point, David, is that, and again, we had this conversation with the secretary before he ran for governor.

[00:09:44] And he did a great job of selling that package on the road when he was running for governor.

[00:09:49] It just wasn't his time to be governor just yet.

[00:09:52] But again, just maybe piecemeal, you know, the best way to eat an elephant is how?

[00:09:59] One bite at a time.

[00:10:01] And this, my friend, is an elephant.

[00:10:04] Yeah.

[00:10:04] You know, it truly is.

[00:10:05] Yeah.

[00:10:05] And it's a lot in a short period of time.

[00:10:07] And so, you know, let's kind of walk through and talk about the different elements.

[00:10:12] Okay.

[00:10:12] To me, the biggest element is, and it's not the biggest chunk of money, but the biggest element is that on June 30th of 2025, the 0.45 sales tax is going to roll off.

[00:10:24] Ding, ding, ding, ding, ding.

[00:10:25] Right.

[00:10:25] And so if you do nothing, if the legislature and the governor did nothing, they would have a big budget hold.

[00:10:34] But taxpayers would get about a $500 million tax cut.

[00:10:39] And why is it rolling off?

[00:10:40] Well, it's rolling off because, as you know, it was, well, it was originally, as I appreciate it, as I remember, because I'm getting old now, I don't remember things, but originally it was a penny, remember?

[00:10:50] Right, yes, I do.

[00:10:50] And then it sunsetted.

[00:10:52] And when it sunsetted, I believe there were a couple of shots at it, but Paula Davis had the bill to make it 0.45.

[00:11:00] But many of the Republicans were the ones who really didn't like a sales tax increase at all.

[00:11:08] Their agreement to do that was based on the fact there would be a sunset and that that sunset would be in 2025.

[00:11:15] And so it clearly is, you know, you can couch it the way you want, but if you pass, if you, so remember, in the administration's package, it's not a renewal of it.

[00:11:31] It's an elimination of the sunset, which makes it permanent.

[00:11:36] And so that's kind of a big deal, right?

[00:11:39] Yes.

[00:11:40] Yeah.

[00:11:40] I mean, you know, I don't know that anybody's noticing too much, you know, that that tax is on the rolls and that it's affecting their daily lives.

[00:11:48] But the commitment was there from a couple of legislative bodies so far.

[00:11:54] And I understand that we've got a $900 million revenue shortfall next year, roughly.

[00:12:01] And if that's the case, where are you going to get that new revenue?

[00:12:05] And I'm going to tell you right now, I don't, nobody asks me, but if they did, I'd say, what's wrong with the Steli plan?

[00:12:12] You know, that's $400 million a year that if we go back in time and add that up to today's deficit, I'm not going to say it's going to add up to the penny, but it's going to come close.

[00:12:22] Yeah, look, I agree.

[00:12:23] So that's the first one.

[00:12:25] And the administration is saying it's $450 million.

[00:12:28] And Richard told us yesterday that sometime in the next week or so that the fiscal office is going to come out and put amounts on that.

[00:12:36] I think it's closer to $500 million now just with inflation and some of the things that have happened.

[00:12:41] So the next piece is, and again, kind of walking through this in an order of what I would consider to be important.

[00:12:48] The next piece is that next year it is very likely that the Budget Stabilization Fund, which is a fund that we put aside money for budgets to kind of help with our budget so we don't have any major crisis.

[00:13:05] Because unlike the feds, we can't print money.

[00:13:07] We have to actually have a balanced budget every year.

[00:13:10] A lot of people don't know that, but it is true.

[00:13:13] And it's a good thing.

[00:13:14] But because of the Budget Stabilization Fund is going to hit a certain level, there was a provision put in by the Republicans that said that if the Budget Stabilization Fund reached a certain amount of a percentage of the entire state's revenue,

[00:13:30] that Louisiana taxpayers would have a reduction in their income tax.

[00:13:35] And so what it also looks like is that on June 30th next year, that Louisiana residents will get that income tax reduction if the legislature does nothing.

[00:13:46] And that is, we were told it's $300 million.

[00:13:51] Wow.

[00:13:52] So that's another $300 million tax cut that the people of Louisiana get if we do nothing, right?

[00:13:59] So that adds to the state's deficit.

[00:14:02] It does.

[00:14:03] And that's why they're talking around $900 million.

[00:14:06] I mean, you know, it's funny how, you know, we used to say a million here, a million there.

[00:14:12] You know, eventually we start talking about real money.

[00:14:14] Now we're talking about hundreds of millions of dollars.

[00:14:17] Yeah, the budget has expanded so much over the past few decades.

[00:14:20] It's insane.

[00:14:21] And a lot of that's in the health care arena.

[00:14:23] No doubt.

[00:14:23] No doubt.

[00:14:24] I mean, you look at when Buddy Romer was here, I think it was somewhere around $12 million.

[00:14:28] Yeah.

[00:14:28] And that was including DHH.

[00:14:30] Right.

[00:14:31] And now, you know, we're going to get off into a rabbit hole here.

[00:14:35] But, you know, a lot of people's thinking is, well, we can't afford to give up that three-to-one money.

[00:14:39] Yeah.

[00:14:40] We've got to come up with that one of the ratio.

[00:14:44] Louisiana's got to have their own money to get the matching funds from the feds at three-to-one.

[00:14:48] But that's, to me, that's what's gotten us in the hole over there is just continuing to go after that carrot on a stick.

[00:14:54] Right.

[00:14:54] Yeah.

[00:14:55] So those are the two big things that I wanted to bring up because, in essence, if we did nothing, I keep saying that, if the legislature and the governor were unable to pass anything or unable to do anything, what they would have to do is do some pretty major cuts.

[00:15:09] And I don't think anybody is for that.

[00:15:10] And I agree with you.

[00:15:11] I think the 0.45, I never had a single one of my clients go, oh, my God, you know I'm paying 0.45 more in sales tax.

[00:15:19] It's not a single one.

[00:15:20] Right.

[00:15:21] I don't have an issue with that.

[00:15:23] And if you just passed that, if you didn't put all the accoutrement on it, you would be able to take $500 million out of that deficit.

[00:15:32] And, again, I don't have an issue with it.

[00:15:34] I don't know how the rest of the state feels.

[00:15:36] I know that there are some Republican legislators that ran on getting rid of that.

[00:15:40] And so it's going to be interesting because you're going to need every Republican vote in order to pass that because it's a two-thirds vote, right?

[00:15:49] It's going to be kind of a big deal.

[00:15:51] So that's kind of where we are.

[00:15:54] So let's talk now.

[00:15:55] Let's get into some of the things that are in the package that would be the restructure.

[00:16:02] So they push really hard on the income tax piece to say that we're out of line in how we pay income taxes.

[00:16:09] And what they would like to do is to reduce state income taxes across the board to 3%.

[00:16:18] I believe that's the number.

[00:16:19] Is it 3 or 3?

[00:16:20] It's 3, huh?

[00:16:20] It's 3.

[00:16:21] That's correct.

[00:16:21] Yeah, that's right.

[00:16:22] And so in order to do that, they're going to – that's part of the reason they would pass the .45 and part of the reason that they would make an adjustment to the reduction in income tax.

[00:16:37] Because you see, we're already going to have a reduction in income tax.

[00:16:39] But I don't think it affects all brackets.

[00:16:42] And in this case, I think they want to make it flat.

[00:16:44] And they want to make it broader, which is not that big of an issue.

[00:16:48] There was a little research that I saw the other day.

[00:16:51] I can't remember.

[00:16:52] I'll try to cite it in the show notes.

[00:16:54] But it said that 60% of the people in Louisiana pay 3.5% or less in income tax.

[00:17:01] So it will affect 40% of the population.

[00:17:05] But it won't.

[00:17:06] You have some people I think the highest rate is 7.5.

[00:17:09] I think that's right.

[00:17:11] Again, not an expert here, but just try to listen a lot and take notes.

[00:17:15] I believe that's the highest rate.

[00:17:16] And so that would come down.

[00:17:18] But in order to pay for that, you've got the taxes that we talked about.

[00:17:22] You probably have to do something with the budget stabilization fund provision.

[00:17:26] There, by the way, are going to be constitutional amendments that are going to have to be passed in order for all of this to work.

[00:17:32] What Richard said yesterday, and he said that.

[00:17:35] I had that question yesterday, and I forgot to call somebody and ask them.

[00:17:38] I said, it was like a light went off in my head.

[00:17:40] I was driving down the road, and I go, wait a minute.

[00:17:42] They've got to have a two-thirds vote.

[00:17:43] And folks, anybody that's listening, that's an apple to an orange when you're talking about a simple majority vote in the House.

[00:17:52] Well, in today's environment, it's monumental.

[00:17:54] Yes.

[00:17:54] It's huge.

[00:17:55] It's huge.

[00:17:56] Yeah, because you have to protect every vote.

[00:17:58] And look, clearly, when, you know, I've talked to all legislators, but when you talk to legislators who come from some of the more high-poverty areas, sales taxes, they believe disproportionate because it's a disproportionate part of your income.

[00:18:12] They're still going to have to pay the same on a toothpaste that you and I do or anybody else does.

[00:18:18] And, yeah, you may have lowered their income taxes, but how much?

[00:18:21] Yeah, and a lot of those people who are in the poor areas, there's going to be no change to their income tax because they're paying 3.5% or less.

[00:18:29] And so let's talk about some of the proposals.

[00:18:32] So what do you want to talk about?

[00:18:34] Service taxes first, about the fact that they're going.

[00:18:36] Yeah.

[00:18:37] Can you define that for me, please?

[00:18:38] Yeah.

[00:18:39] So the service taxes, as I understand it, are that, and I'll give you the example that was used a while back by Richard, and it's a good example.

[00:18:47] So when – and we're old enough to remember this, but when you used to go to Blockbuster and you would rent a tape.

[00:18:54] Right.

[00:18:55] That's awful that I'm saying that.

[00:18:56] Yeah, people don't know what a tape is.

[00:18:58] It was a way of watching a movie back there.

[00:19:00] Yeah, you'd rent a movie.

[00:19:01] Well, when you rented that movie, you paid sales tax on that, right?

[00:19:04] You paid – but it's no longer sales, right?

[00:19:08] It's services.

[00:19:09] So, you know, when sales taxes were originally envisioned, they were – our economy was two-thirds goods and one-third services, which changed, right?

[00:19:20] And so now it's really flipped.

[00:19:21] And so we have a lot more services, and we really don't tax those.

[00:19:25] Not that I'm an advocate for it, but in the context of the conversation about the movie, now it's streamed to our house.

[00:19:35] Now it's – you no longer pick up the tape.

[00:19:38] It just comes over the internet.

[00:19:39] And then, of course, we've got the internet.

[00:19:43] So digital goods are no longer digital goods.

[00:19:46] They're digital services because you don't rent.

[00:19:50] I mean, you don't buy a – it's called a streaming service, right?

[00:19:53] So YouTube, Netflix, Amazon, Hulu.

[00:19:57] I don't want to leave anybody out.

[00:19:58] I'm in the film industry, so I don't want to get in trouble.

[00:20:01] But, you know, those are some of the services.

[00:20:03] But there's a lot of other services.

[00:20:05] So, you know, car washes.

[00:20:08] And I bring –

[00:20:09] Well, what about lobbyists?

[00:20:10] And this past Thursday, I was testifying in committee at the State Capitol in Baton Rouge.

[00:20:15] Chairman Troy Romero said, when I sat down, Mr. Mapes, will you please identify yourself in the microphone and tell us why you think we're here today?

[00:20:22] And I said, yes, sir, I will.

[00:20:23] I'm Joe Mapes.

[00:20:24] I'm the lobbyist for the Farm Bureau Federation.

[00:20:27] I'm here today.

[00:20:28] No, I'm sorry.

[00:20:29] I didn't say that.

[00:20:30] I said – we'll have to cut that part out.

[00:20:32] I said, hey, I'm Joe Mapes.

[00:20:33] I am here for the Farm Bureau Federation of Louisiana.

[00:20:36] I am the legislative specialist.

[00:20:37] And I am not a lobbyist.

[00:20:40] And you know what?

[00:20:40] You know what?

[00:20:41] Somebody – a legislator immediately turned to me and said, oh, don't worry.

[00:20:44] We'll get you.

[00:20:45] Yeah.

[00:20:45] And you know he's right.

[00:20:46] But the thing is – and it's not – it's a cute story.

[00:20:50] But how do you really define service?

[00:20:52] And it's like a slippery eel.

[00:20:55] You know, are we going to turn everybody away from being this service and providing the same services,

[00:20:59] but they're called something else to try and dodge the tax?

[00:21:02] Well, and look, I asked a question of Richard yesterday.

[00:21:06] I said, so tell me about the lobbyist tax.

[00:21:09] He said, well, it's popular.

[00:21:10] I said, okay, so yeah, we're going to go get them.

[00:21:12] What about lawyers?

[00:21:13] Are you going to put lawyers in there?

[00:21:15] And he kind of shook his head.

[00:21:16] And you know that's not going to happen.

[00:21:18] Right.

[00:21:18] But you know how much he said that he thinks that generates in taxes?

[00:21:24] A million dollars.

[00:21:25] And I won't even argue that.

[00:21:28] I don't know.

[00:21:29] I don't know what people get paid.

[00:21:30] I don't know how much they get paid.

[00:21:31] But I asked him the question then.

[00:21:33] I said, so I'm going to leave his name out.

[00:21:36] But how do you tax Joe Blow, who is the executive director of the Widget Association, who does education?

[00:21:47] He does outreach.

[00:21:49] He does economic development.

[00:21:50] He runs a group self-insurance fund.

[00:21:53] He runs all of these other things.

[00:21:54] And oh, by the way, he's registered as a lobbyist.

[00:21:58] I asked Kyle Ruckert the same thing.

[00:22:00] And he said there will be people to figure that out.

[00:22:02] And pretty much the same question, except for Richard said, well, that's what we have auditors for.

[00:22:08] So get ready to be audited.

[00:22:10] Oh, okay.

[00:22:11] But you know, in the end, if you really want to broaden the tax, if you want to make it.

[00:22:16] And look, my daughter is an attorney.

[00:22:18] I think we ought to tax the attorneys.

[00:22:21] But here's the problem.

[00:22:22] When you tax them.

[00:22:22] No, you can't exclude one professional service over another.

[00:22:26] So the real question for us is we don't pay that tax.

[00:22:30] Our clients do.

[00:22:32] And so I guess it's, you know, I guess my point is business is high, Ross.

[00:22:39] I mean, it's businesses.

[00:22:40] I mean, you've got a really good book of business.

[00:22:42] And you represent all kinds of different people.

[00:22:45] I do, too.

[00:22:45] I have corporate clients.

[00:22:47] So they pay it.

[00:22:48] Is that what we're trying to encourage?

[00:22:50] So that's a unique way to look at it.

[00:22:52] But you're putting more tax on business.

[00:22:54] That's right.

[00:22:55] Ultimately.

[00:22:55] Yeah.

[00:22:55] So I would also tell you, and I think you know this, and I know a lot of legislators listen to this.

[00:23:01] If you go in and look at the definition of lobbying and what it is, we only have bills for less than six months out of the year.

[00:23:10] And so the rest, if we don't have a bill and we're not going on some big campaign, are we actually lobbying in that?

[00:23:15] And how do you do that breakdown?

[00:23:17] Richard said that, and it's a good point.

[00:23:19] Look, smartest guy.

[00:23:21] I know.

[00:23:21] He's brilliant.

[00:23:22] Yeah.

[00:23:22] And he said, well, when you place that, you have to say how much you lobby if you're a corporation for tax purposes, right?

[00:23:31] Well, when a corporation does that, they take the whole amount that they pay us, right?

[00:23:37] Right.

[00:23:37] We don't lobby 100% of the time.

[00:23:41] A lot of times we're working on relationships.

[00:23:43] How many times do you visit with a legislator and a member, and you talk about their kids playing ball, and you know, you don't even bring up any issues?

[00:23:51] As many times as I can.

[00:23:53] Yeah.

[00:23:53] Without ever bringing up an issue.

[00:23:54] That's how I want to be with a legislator or any elected official.

[00:23:58] I want to have that type of relationship that, you know, we're more concerned about each other and what's going on in each other's lives, and then we can always get to business.

[00:24:06] Right.

[00:24:07] And, yeah, and, you know, again, I think people think we take people out to big dinners and they vote with us.

[00:24:12] That's not how it works, right?

[00:24:14] If our job were that easy, everybody would be a lobbyist.

[00:24:17] Yes, that's true.

[00:24:18] If all I had to do was take somebody else's money and contributions and expense account and apply it to a body, and that body, once I deliver that from the first group, is going to do whatever I want, everybody would be in line to have our profession.

[00:24:31] And for anybody out there listening, it's not that easy.

[00:24:35] And I'm not complaining.

[00:24:36] I love it.

[00:24:37] Yeah.

[00:24:37] I'm just saying it's not what a lot of people think it is.

[00:24:39] No, it's for every minute we spend at the rail, we spend an hour doing other stuff to prepare for that.

[00:24:44] Oh, yeah.

[00:24:44] Yeah.

[00:24:45] We make it look easy.

[00:24:46] That's true.

[00:24:47] When we walk into a committee room and the vote comes out unanimously and the witness was treated very well, okay?

[00:24:54] And that wasn't by accident.

[00:24:56] Right.

[00:24:56] It didn't just happen in the middle of the meeting.

[00:24:58] And it's communication and education and letting people know what's really happening and so on and so forth.

[00:25:04] A hundred percent.

[00:25:05] Look, I think I was with a group of my colleagues last night, and we talked about it.

[00:25:10] I mean, you know, look, if that's what they want to do, then they can do it.

[00:25:13] We're not – we don't pay it.

[00:25:15] Now, we do have to set up a tax account with the state to send that money in when we receive it.

[00:25:21] So we're going to be like the sheriff of the parish.

[00:25:24] That's right.

[00:25:25] That's exactly right.

[00:25:26] And, of course –

[00:25:27] That's okay.

[00:25:27] We'll get a little badges.

[00:25:28] Well, when the auditors come in, I want to make sure that my books – I have a lobby set of books.

[00:25:33] And then I have – because, you know, we do association management.

[00:25:36] Right.

[00:25:36] We do all kinds of education.

[00:25:39] Business consulting.

[00:25:40] Yeah.

[00:25:40] We do strategic planning.

[00:25:42] We do all kinds of different things.

[00:25:44] We do it under one umbrella.

[00:25:45] Right.

[00:25:46] What lobbyists are going to have to do is go out if they're doing any of those other services or if an individual person like that is the executive director of a large organization,

[00:25:56] is registered as a lobbyist, which most are, just in the event that they actually do something that constitutes lobbying.

[00:26:03] It's a very small part of their time.

[00:26:05] And it's going to be interesting to see how the auditors go out and do the gotcha thing.

[00:26:08] Because that – it creates an environment where you could have someone direct their Department of Revenue to say, go get that lobbyist.

[00:26:16] Right.

[00:26:16] Right.

[00:26:16] It becomes more like the federal government.

[00:26:18] Right.

[00:26:18] Because I don't like what they said or what have you.

[00:26:20] But – so there are some other things that I do find interesting.

[00:26:23] And so lawn service.

[00:26:26] If someone cuts your grass, you're now going to have to – you're going to have to pay – I mean, right?

[00:26:33] Right.

[00:26:33] So what happens if you're an individual – so I just don't know the answer to this.

[00:26:37] But let's just say I'm David Tappman.

[00:26:39] I'm getting old.

[00:26:39] And I am.

[00:26:40] David Tappman and getting old.

[00:26:42] And I want to hire somebody to cut my grass.

[00:26:45] Do I then become a tax submitter?

[00:26:48] Or do they become –

[00:26:49] Well, the lobbyists do.

[00:26:50] You just said it yourself.

[00:26:52] Yeah.

[00:26:52] So I think each resident needs to set up their own tax account to pass on those taxes.

[00:26:56] So a young kid – my son did it.

[00:26:58] A young kid goes out and starts cutting grass.

[00:27:02] Used dad's lawnmower, paid, you know, in his trimmer and whatever, and gets paid, you know – well, when I did it, it was like $5.

[00:27:10] But – because I did that, right?

[00:27:12] But they go out and start doing that.

[00:27:13] Does that college student now become a tax reporter?

[00:27:16] So there's really some interesting parts of that.

[00:27:20] Haircuts, right?

[00:27:21] Your barber is going to have to start doing that.

[00:27:24] But he made a good point on the car wash thing, but I still don't know that I buy into it because – but if you – so you – you know, in the old days, it was a car wash.

[00:27:32] You'd hire somebody to come do it or you'd do it yourself.

[00:27:35] So now you have – and I'm going to give him a plug because I pay him a lot of money, but I really like him.

[00:27:39] Benny's car wash.

[00:27:40] Yeah, right.

[00:27:41] I pay a subscription.

[00:27:42] So now that subscription is going to be taxed.

[00:27:45] And so when you start adding all that up, what does it become?

[00:27:48] If I have – I don't remember, but I think I pay about $100 for YouTube TV a month.

[00:27:54] So 4% a month, $4, it's $40-something.

[00:27:57] So you take all of those little issues, all those things that are going to be taxed.

[00:28:01] I think tattoo parlors are going to be taxed.

[00:28:04] I don't have any tattoos, but I feel for those people too.

[00:28:06] Tanning salons are going to be taxed?

[00:28:08] Oh, yeah, yes.

[00:28:08] That's right.

[00:28:08] That actually was addressed.

[00:28:10] And the question came up.

[00:28:11] And some of the arguments on like –

[00:28:14] Wasn't one of the answers given that, hey, listen, these types of services aren't afforded by people in lower income brackets.

[00:28:20] They're only afforded by people in higher income brackets.

[00:28:24] And so we're not hurting anybody.

[00:28:26] These are basically – and they didn't say this, but aren't they implying that these are basically luxury taxes?

[00:28:31] Yeah.

[00:28:31] The thing that was interesting to me, and maybe I'm just missing this.

[00:28:36] You know, I say it all the time.

[00:28:38] I'm a John Curtis graduate.

[00:28:39] I'm not that smart, but the part that – a lot of the arguments on the – that has been made on the – say, let's just take car wash and lawn service.

[00:28:51] Well, you have the option to cut your own grass, so you don't have to pay the tax if you want.

[00:28:56] You just cut your own grass, and so it's no big deal.

[00:28:58] But you can't cut your own hair.

[00:29:00] You can't put your own tattoo on.

[00:29:02] I mean, maybe you can.

[00:29:03] I can't.

[00:29:03] It would be awful.

[00:29:05] So I don't –

[00:29:06] Not continue to be accepted in society.

[00:29:10] Yes, that's right.

[00:29:11] Piercing or whatever else it's going to be.

[00:29:13] Right, right.

[00:29:13] But those are just a few of them.

[00:29:15] That's a great example, though.

[00:29:16] So I was told yesterday – we were told yesterday, the group, was it generates $600 million.

[00:29:24] So you put the $500 million of the .45, you take the $300 million of the potential reduction in income taxes.

[00:29:36] Income taxes, correct.

[00:29:36] You put $600 million on top of that, you're at $1.2 billion in tax increases.

[00:29:43] It's a lot of money.

[00:29:45] By the way, it could be higher because there's some other issues that I want to talk to you about because you're more of an expert in this than – I mean, you're an expert in all of this.

[00:29:53] But the cleaning of the pennies, it's a big deal.

[00:29:57] And so just so our audience understands, most people understand this, but I believe there are – so we have 4.45% sales tax in the state of Louisiana.

[00:30:09] And the only clean part of it – I'm going to call it clean – that has no exemptions whatsoever is the .45, as I appreciate it.

[00:30:17] So there's 4 cents that has exemptions within those pennies.

[00:30:22] So let's pretend – and we'll talk a little bit about this, but if you want to buy bait for crawfish, you're a commercial crawfisherman, you don't pay a portion of those taxes.

[00:30:32] I don't know it exactly.

[00:30:34] But apparently in those 4 cents, there's 225 exemptions.

[00:30:39] Now, I could be wrong on that, but that's what –

[00:30:41] That sounds accurate from what I remember from a few years back.

[00:30:44] So 225 exemptions, which means that certain people, if they go and buy something, they would only pay .45 because that's the only clean penny.

[00:30:53] And some of them may pay 1.45 or 2.45 because they're only exempt on the two pennies.

[00:30:59] But a lot of those exemptions on those pennies go to some of the people who I believe from an industry standpoint most need it, right?

[00:31:10] Yes.

[00:31:10] And I think farming and agriculture is the best one to look at.

[00:31:15] These exemptions were put on nationwide in statute and in constitutions many, many years ago because they were needed, okay?

[00:31:26] And they're still needed to keep our state competitive with other states because they've got similar tax structures for farmers there.

[00:31:34] So to tinker with those, it's a delicate balance.

[00:31:37] But there's one in there, David, called the agricultural use value tax.

[00:31:41] And what that says is that agricultural land is assessed at a lower rate than commercial land, for example.

[00:31:48] And it's assessed at a much lower rate.

[00:31:51] And it's in the Constitution because it is so delicate because the farmer is tied to the land.

[00:31:56] So if the land taxes go up too high and then their input prices go up too high, they're going to end up going out of business because farmers are price takers.

[00:32:07] They're not price makers.

[00:32:08] And what that means is whatever the market is willing to pay for their harvest, okay, for their commodity, that's what they get.

[00:32:16] Okay?

[00:32:16] So if they get more taxes put on them, you know, or more fees put on them, they can't pass that on.

[00:32:23] They can't pass that on to the consumer.

[00:32:25] They can't pass that on.

[00:32:26] Like we were talking about a second ago that other taxes would be passed on to, you know, the businesses and industries that we represent.

[00:32:33] We wouldn't be able to do that.

[00:32:34] So that is on the table, okay, for being moved into statute.

[00:32:41] And you said you were there for a long time yesterday at the committee listening to this.

[00:32:46] The justification is, well, we just want to make it easier so we don't have to have a constitutional convention every time to address these issues.

[00:32:54] So we put it in the statute.

[00:32:56] Still going to take a two-thirds vote, okay?

[00:32:58] But we don't have to have on that piece of legislation whatever part of the Constitution it changes.

[00:33:04] But we just don't have to open the Constitution, up the entire Constitution, and have a constitutional convention.

[00:33:11] Great point.

[00:33:12] So who are you doing that for?

[00:33:14] Because are you telling us that you want to come and get our exemption money right now, tax us at a higher rate right now?

[00:33:20] Because if that's what you're telling us, no, that's not us.

[00:33:23] We just want the – so is it for the future?

[00:33:25] Because we trust this current body of legislators and this administration.

[00:33:31] No, we do.

[00:33:31] But it's the future ones that we have to be concerned about, right?

[00:33:35] That's right.

[00:33:36] And we don't know what's coming, and don't think it's not possible for a George Soros Foundation or another similar organization to infiltrate politics to the degree that we wake up one day and say,

[00:33:48] holy shit, what happened here in Louisiana?

[00:33:50] It's very possible.

[00:33:52] They put a guy and some waders with a fly fishing rod in a beautiful creek on an ad on TV a few years back in Georgia,

[00:34:00] and he won the ag commissioner because he looked like an ag commissioner.

[00:34:04] He was sold as an ag commissioner.

[00:34:05] This guy was not friendly to agriculture, and that's where I'll stop.

[00:34:11] But my point is everybody woke up in that state and was surprised that this man had won commissioner of agriculture.

[00:34:17] And so we have to think about the future.

[00:34:20] And if they're not wanting to make it easier to get to those exclusions and those exemptions now,

[00:34:26] then they have to be doing it for the future.

[00:34:29] And if they're doing it for the future, that's of great concern to us.

[00:34:32] Well, and look, I'm not a farmer.

[00:34:36] I do keep a garden.

[00:34:38] I do too, but I don't get any exemptions.

[00:34:40] I don't either.

[00:34:41] And I don't need any.

[00:34:42] But the farmers are so critically important to all of us, to America, right?

[00:34:46] We are a nation rich in agriculture, but we're losing farmers.

[00:34:52] We're losing farms.

[00:34:53] We're losing farmland.

[00:34:54] And the reality of it is, is that we just, what was a hurricane?

[00:34:57] Is it, was it Ida that just hit?

[00:34:59] Or what was the one that just hit?

[00:35:02] You had Ida a couple years back.

[00:35:03] Okay.

[00:35:04] And then you had Milton.

[00:35:05] And then you had.

[00:35:06] The one right before it.

[00:35:07] Yeah.

[00:35:08] Yeah.

[00:35:08] So I know there was some.

[00:35:10] Helene.

[00:35:10] There was some damages to some of our crops because I was talking to a farmer that I know.

[00:35:15] Right.

[00:35:16] And he said that his soybean crop, he's in South Louisiana, was completely wiped out.

[00:35:20] And I said, well, do you have crop insurance for that?

[00:35:23] He goes, yes, but it only pays 50%.

[00:35:26] And so how, you know, how do you stay in business?

[00:35:28] If you got completely wiped out in your investment and you only got 50% of that back, their margins

[00:35:34] are not great.

[00:35:35] Right.

[00:35:35] They have good years and bad years.

[00:35:37] So they got to, in the good years, they got to put away money for the bad years.

[00:35:40] But, you know, I didn't even talk to a sugar cane farmer, but I got to imagine a lot of

[00:35:44] that cane was knocked down too.

[00:35:45] It was laying down.

[00:35:46] That's right.

[00:35:46] Which really reduces, even if they can harvest it, it really reduces the sugar content and

[00:35:52] sugar cane.

[00:35:52] So supporting our farmers is such a critical part of, you know, and look, so from an agriculture,

[00:35:59] from farmland to growing things, to our crawfishermen, to anybody who's out there in any sort of way

[00:36:06] working in that where they are already limited on the edges.

[00:36:11] And I, you know, it's crazy.

[00:36:12] You brought that up.

[00:36:12] I forgot about it.

[00:36:13] You don't set your price.

[00:36:15] Like you and I can set our price.

[00:36:16] And if somebody doesn't pay it, we just say, good, go somewhere else.

[00:36:19] No, the market sets the farmer's price.

[00:36:21] The market sets it.

[00:36:21] And it's dependent on so many other variables that they can't.

[00:36:24] They're the biggest gamblers that there are.

[00:36:27] They're gambling that there's going to be rain, that there's going to be the right amount

[00:36:30] of rain.

[00:36:31] They're gambling that, you know, their new hybrid crop is going to grow.

[00:36:36] They're gambling that, you know, no restrictions or regulations are going to come down on them.

[00:36:40] And it goes on and on and on.

[00:36:41] They've got all the concerns of a typical business or industry or profession, but then

[00:36:46] they've got to add those, what I just added, and many more onto that list of concerns.

[00:36:51] So, you know, if I were king, I would probably try to clean a penny maybe, but I certainly

[00:36:56] wouldn't go in and try to clean four.

[00:36:58] You know what I mean?

[00:36:58] It just seems like a lot all at once.

[00:37:02] You know, but I'm not king, but, you know, making some incremental progress in terms of

[00:37:07] how we do our tax structure.

[00:37:09] Sure.

[00:37:09] And maybe if you clean some pennies, you could reduce the number of pennies that you charge.

[00:37:13] So if you had, if you incrementally changed some of those, cleaned up some of those pennies,

[00:37:19] maybe it's not 0.45.

[00:37:21] Maybe it's three, I mean, a 4.45.

[00:37:24] Maybe it's 3.12.

[00:37:25] Right.

[00:37:26] Right.

[00:37:26] That's right.

[00:37:27] So we live.

[00:37:27] And then it's real taxes.

[00:37:30] Right.

[00:37:30] And so I think, again, they're not, no one, they didn't call me when they put the package

[00:37:34] together.

[00:37:35] No, they didn't.

[00:37:36] I don't know why.

[00:37:37] You know what my slogan is at Mapes and Mapes is if you're not at the table, you're on the

[00:37:40] menu.

[00:37:41] I like it.

[00:37:41] I like it.

[00:37:42] We weren't called either.

[00:37:43] Yeah.

[00:37:43] And, you know, we're on the menu too.

[00:37:45] Right.

[00:37:45] So don't, and it's like I told my client though, don't take it personally.

[00:37:48] It's not being targeted as an industry or profession.

[00:37:50] This is their strategy, you know, to put everything in, in there and then move forward with it.

[00:37:56] Yeah, look, I admire the fact that they're trying to come in and make changes.

[00:38:00] As well as I.

[00:38:00] Now, you know, I think there are some other changes we could make that have nothing to

[00:38:06] do with taxes that would be bigger impact.

[00:38:07] But we'll talk about those in a, in, you know, in a few minutes.

[00:38:11] There are, there is another pretty big part of this package and that is the elimination

[00:38:15] of a broad range of tax credit programs.

[00:38:19] So take, for example, the two largest ones are the motion picture film tax credit.

[00:38:26] I think it's called the motion picture investor tax credit.

[00:38:30] And it provides, when someone comes in and does a production, they get pre-approved.

[00:38:36] And then after they spend all of their money, they get, they can get a credit.

[00:38:41] And so that's one.

[00:38:42] The quality jobs program is a big program that has been very successful.

[00:38:46] Ironically, I helped pass that a long time ago.

[00:38:49] It was a one-off, you know, where we get hired to come in and do some work to try to get a

[00:38:54] great program.

[00:38:55] It's been incredibly successful.

[00:38:56] And I know a lot of people are kind of rolling over in their skin.

[00:39:00] But I'll give you one that I think is really important.

[00:39:02] And it's very small in the big picture, but it's really important.

[00:39:05] And that is the historic tax credit.

[00:39:07] We have, it's not, you know, people might think that they just go to New Orleans or to

[00:39:11] Baton Rouge or to Alexandria and do that.

[00:39:14] But you got little main streets all over Louisiana that are rebuilding their main streets,

[00:39:18] trying to bring economy and to bring investment into their communities.

[00:39:24] And it's been a very effective program.

[00:39:28] Well, and those little cities need life.

[00:39:30] That's right.

[00:39:31] They need them.

[00:39:31] Well, and so what you're saying is that tax program, incentive or rebate or whatever,

[00:39:37] has gone beyond paying for itself.

[00:39:40] Well, and I'll give you an example.

[00:39:41] So I know that, you know, I represent the motion picture industry.

[00:39:44] Yes.

[00:39:45] And so in Louisiana, and I'll lead that effort.

[00:39:48] You're talking 12,000 jobs in that program.

[00:39:52] Now, does that mean if they get rid of it, all 12,000 are gone?

[00:39:55] No, probably 10.

[00:39:56] So you're going to pass a part of this that says you're going to build jobs because your tax system

[00:40:05] is going to be better.

[00:40:06] But yet you're going to lose maybe eight, nine, 10,000 jobs.

[00:40:10] The quality jobs program, I think, is so good because it really incentivizes employers to make their employees better.

[00:40:17] And now I'm going to kind of go off a little bit and say this.

[00:40:22] When I was on the school board, and as you know, I served on the school board for 12 years,

[00:40:26] one of the things that I was told.

[00:40:27] God bless you.

[00:40:28] Yeah.

[00:40:28] Yeah.

[00:40:28] Well, I need it.

[00:40:29] I'm still in rehab.

[00:40:31] So, but I did.

[00:40:33] I did go see all my friends the other day.

[00:40:35] God, I miss them.

[00:40:36] I love them.

[00:40:36] They're so great.

[00:40:37] The people always are.

[00:40:39] That's not the problem.

[00:40:39] Oh, and I love the kids.

[00:40:41] Look, it was a great experience.

[00:40:42] It took years off my life and points.

[00:40:44] But I was always told when I was being lobbied on issues where they said, oh, my God, this is when companies come in.

[00:40:53] They need education's number one.

[00:40:56] Okay.

[00:40:58] So that's number one.

[00:41:00] And what I've heard lately from the procurement work I do, which is a different thing than my lobbyist work,

[00:41:05] where companies call me and say, how do I get, how do I build a data center in North Louisiana?

[00:41:10] You know, how do I come in and build a facility where we're going to do a phone center or whatever?

[00:41:16] I use those as just a couple of examples because those just happened in the last six months.

[00:41:22] They say to me, wow, I didn't realize insurance was that expensive.

[00:41:29] And what they often tell me is people pay almost always it's double what any other states pay.

[00:41:37] So they're going to you have a big operation out of Dallas, Texas, let's say, and they want to come in.

[00:41:41] It's just a real story.

[00:41:43] Dallas, Texas, they want to come in.

[00:41:44] They want to be in North Louisiana because the insurance for the property is a little bit less because it's further off the coast.

[00:41:50] Because of the wind zone, right?

[00:41:51] They need – we don't have this.

[00:41:53] We don't have the electricity infrastructure for them.

[00:41:56] And so that's going to have to be built out.

[00:41:59] But the reality of it is is they're like, wow.

[00:42:01] So all of my employees are – I'm going to have to give them a raise just to cover the cost of insurance or private school.

[00:42:10] And, oh, by the way, when I come there, we've got some of the worst roads in the country.

[00:42:13] We've got not a qualified, educated workforce.

[00:42:17] And so those things seem to be, to me, like when all of that was going on with me at the school board,

[00:42:23] never was tax policy a part of what people came to me and said, we want to do this in Baton Rouge, except for ITAP.

[00:42:31] So you had people who would come in and everybody got it.

[00:42:35] I think I voted against one the whole time I was on the board.

[00:42:39] The Industrial Tax Exemption Program.

[00:42:41] That's right.

[00:42:41] And I'm sorry.

[00:42:42] I'm glad you pointed that out.

[00:42:43] And it is a program by which if industry comes into a particular area, that governmental entity has the ability.

[00:42:51] The state makes the recommendation.

[00:42:53] They apply through the state.

[00:42:55] And then the state votes for it.

[00:42:58] And then recommendation goes.

[00:42:59] And now there is local input.

[00:43:01] So the locals can go in.

[00:43:03] And it's an 80% reduction now.

[00:43:05] When I first started on the school board, it was 100%.

[00:43:08] Now it's 80%.

[00:43:09] And the idea is that for a certain period of time, depending on how that ITAP is set up, usually I think it's 10 years.

[00:43:15] That's right.

[00:43:16] And they do not have to pay taxes on 80% of their investment.

[00:43:24] So the value of the property, the value of the buildings they put up, the values of machinery and equipment.

[00:43:29] That's the way I understand it.

[00:43:30] That's right.

[00:43:31] And so that's there.

[00:43:33] That was the one thing.

[00:43:34] They basically get a tax break to build a plant in a parish, for example.

[00:43:40] That's going to benefit the community.

[00:43:42] Roads get improved.

[00:43:43] Right.

[00:43:43] And there used to be a job requirement that has been removed.

[00:43:46] And it's probably a good idea because it's hard to project what it is.

[00:43:50] But the reason I like ITAP, and I think it's a good program.

[00:43:54] And again, I did vote against one and got beat up pretty badly, but it was a bad ITAP.

[00:43:58] But the reason I like it is because people come in and they put value where there is or little value now.

[00:44:04] So you have a piece of land.

[00:44:06] You know, you have 100 acres.

[00:44:07] Whereas it's empty right now.

[00:44:09] You're getting basically a rural, you know, tax collection on it.

[00:44:13] So these people say, hey, I'm going to come in and I'm going to put $100 million into that 100 acres.

[00:44:18] And what I hope is, is that when I leave it, it has created value that after my ITAP is done, where I get that 80% tax break, it'll all be there for the rest of however long the life of that program is.

[00:44:32] And so those are the things that really draw people to the state of Louisiana.

[00:44:37] But this package doesn't really address anything that the major issues that companies are talking about when they're thinking about leaving, I mean, coming to Louisiana.

[00:44:47] No, I agree with that.

[00:44:49] You know, you've got to take all that into consideration.

[00:44:53] That was a really great conversation with Joe Mapes.

[00:44:57] And we have another part of it, a second half of it that we will have in our next episode.

[00:45:03] But until then, if you want to follow us on social media, you can follow us at PelicanBrief225.

[00:45:10] That's on all the major social media platforms.

[00:45:13] If you'd like to watch us on YouTube, you can find us on YouTube at ThePelicanBrief225.

[00:45:19] You can always email me at david at pelicanbriefpodcast.com.

[00:45:28] And we are always interested in hearing from our folks who are listeners.

[00:45:33] And until next time, we are The Pelican Brief.

[00:45:43] The Pelican Brief is an Offscript production.