BATON ROUGE — The House Ways and Means Committee advanced a proposal for a constitutional amendment that would sharply increase the cap on the share of severance tax revenue that each parish can keep.
If voters across the state approve the change, the new annual cap would be $10 million for each parish, up from about $1.1 million now. Eighteen parishes in various parts of the state would benefit the most, across to legislative analysts.
The proposal would cost the state $46.9 million over five years, according to the analysts.
The committee passed that proposal Wednesday along with another bill, sponsored by state Rep. Phillip DeVillier, R-Eunice, that would reduce the state’s severance tax rate on oil from 12.5 percent to 8.5 percent in half-percent increments until fiscal year 2032.
A fiscal note attached to the bill estimated that it would cost the state $90 million over five years. The share that all the parishes receive also would drop, by $4.9 million a year by 2032.
Parishes generally receives 20 cents back from the state for every dollar it collects in severance taxes on mineral resources extracted in that parish, and an increase in the cap would mean that some parishes would receive money that would have gone to the state.
“This all goes back to the local people,” said state Rep. Lawrence Bagley, R-Stonewall, who proposed lifting the cap. “That’s why I’m here. To keep more money with the people at home.”
Under a companion bill, money sent back to the parishes must go toward infrastructure.
“Half that money will go to roads bridges and water,” Bagley said.
Guy Cormier, executive director of the Police Jury Association, said this bill is the fairest situation possible.
“We want more money because we feel like we are producing it, and it's not a fair share anymore,” Cormier said.
According to a fiscal note attached to the bill, the 18 parishes that would benefit the most from an increase in the cap are: Caddo, Red River, Terrebonne, Lafourche, Bossier, Vermilion, St. Martin, St. Mary, Lincoln, Sabine, Cameron, Bienville, Beauregard, Natchitoches, Claiborne, Calcasieu, Iberia and LaSalle.
DeSoto and Plaquemines also would benefit, but their revenue increase would be constrained by the new cap.